Can’t add images to library

Hey, recently updated the Receptar theme and now I can’t upload any new images to my site. I get this error: “The server cannot process the image. This can happen if the server is busy or does not have enough resources to complete the task. Uploading a smaller image may help. Suggested maximum size is 2,560 pixels.”
– Tried resizing images and compressing them. The only size I can upload is thumbnail size under 100px and under 40KB.
– Have exported to different file types – jpg, png, etc.
– Disabled every plugin to see if it helped and it didn’t.
– Have updated MySQL to version 8.
– Updated PHP to v8.1.
Not sure what else to try?

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