Image Upload/Featured Images suddenly stopped working

Everything was working just fine when it suddenly stopped attaching properly images or setting as featured.

Actually there are the following certain symptoms:
-When creating a new post:
1.via the add Media button process i select and upload a new image with the thumbnail showing properly and when i press insert into post/insert gallery a blank media box appears in the post’s textbox.
2.when i try to set a new featured image (one that is newly uploaded or one of the old images) the bottom right ‘set featured image’ widget looks like no image is selected or set. I click “set as featured image” and the modal closes but the image never appears.
-When I try to browse my Media>Library any newly uploaded image is blank with no thumbnail available and no image file appearing when clicking view (via the ‘domain/?attachment_id=…’ link).
-When browsing my ftp server directory or typing the url ‘domain/wp-content/uploads/2013/3/image.jpg’ the images are appearing just fine.
-Any images that I upload I can see in the media browser but their thumbnails there aren’t cropped like normal, it’s a thumbnail of the entire image where normally (and previously uploaded images) it’s cropped. They also don’t have pixel dimensions listed like other images do.

This is causing a major problem on a busy e-commerce site. I’ve seen others with the same issue who said it was fixed when they disabled the “Advanced Custom Fields” plugin, but I don’t have that plugin.

I did not make any changes to anything, no new plugins, no updates. It worked fine in one product listing, then I went to the next one and it stopped and now won’t work for any.

I’m wondering if the advanced custom fields plugin or something similar is integrated into the theme and could be causing this strange issue.