Unable to upload theme images after Nelo upgrade

After updating to WPMU-Nelo 2.2.1 I lost all our theme-specific images and am no longer able to upload them. To clarify, I am unable to use the theme's built-in function for uploading the intro image, top header logo, and blog box images for the custom homepage.

I had various customizations and am using the child theme so I went through all core files to update my child properly. I had to re-activate the child and in doing so lost all the sidebar widgets (which were easy to replace thanks to WP 3.3's inactive sidebars), and all the homepage images also disappeared. Now I am unable to replace them.

I did confirm that the theme's custom image gallery uploader is functioning properly, as is the background image uploader and our WP media gallery. It is only the Custom Homepage image upload that no longer works. I get the spinning icon with a "processing" message but when the page refreshes no image has been uploaded. If I use the Upload and Crop Option, I get nothing but the "Please Wait..." message forever (well, at least 5 minutes which is the longest I bothered waiting for 126kb jpeg). There are no errors in the server logs.

Are these images still getting stored in the blogs.dir/x/thumb directory? I notice the old files are still there, but they do not display. I have confirmed proper permissions for this and the theme directories, but it doesn't even work when set to 777.

Any feedback is greatly appreciated.