think I found a fix perhaps.. I think during my update I deleted the plugin folder and uploaded the fresh one, activated it, and hoped that all was well. It seemed fine, but I realized I had no signups for three days, which is very unusual.
After some more poking around, I think that the problem was the lack of a folder being re-created after I deleted the plugin and upadted. Looking at the options I noticed this:
/wp-content/plugins/si-captcha-for-wordpress/captcha-secureimage/captcha-temp/
so I created that, and it still didn’t work – but then I decided to try it in the mu-plugins folder that I had moved the plugin too – creating a a “capthca-temp” folder there and changin permissions seems to make it work now.
So now I am going to try to make it work again in the regular plugins folder, and deleting the mu-plugins one.
I think re-adding that captcha-temp folder has fixed the problem. Hope this helps anyone else who has the same issue. I delete and upgrade through ftp, not through the WP backend.