Images does not show up.

Hi

We run WPMU 2.9.1.

We just came across a very weird issue ...

We uploaded some files(tried jpg, png & zip) though the Media section and also the Add media section of Post/Page.
The files get uploaded well and we see them good when we FTP the server to the uploaded path(eg: /blog.dir/100/files/2010/03) ... after downloading them via FTP to our hard-disk also they are good(both image and zip open).
But, we are unable to see the images, the zip files get downloaded corrupted through our WPMU installation. I.e when we open the uploaded images/file through the "File URL" wordpress provides we get error ... This seems to be a new issue, it was working fine before.

What might have gone wrong ?

Thanks & Regards