Ok, a few things...
First - yes, picture uploading has been disabled. You may all groan, BUT, this is the only forum I am a member of that allows it. All others require you to have an external host and then link the image.
Second - Its not an issue of having a poor host. The host server I have is not designed for hosting forums. In fact, it is technically in the terms of use that you will not use the server for hosting LARGE forums. And this is a pretty large forum.
Third - In terms of $$$...thats the thing, I already have the server for my other sites. I host BCC free of charge basically for Jimmy. [even though he tries to pay me ;) ]
Fourth - the server host has let me know exactly what is causing the issue, and I am working with them and the admin/web staff here to fix it. Its basically the result of BOTS and spam, so it seems.