I had trouble uploading both a header image and a logo image to my atahualpa site (BridgingVoices). I uploaded images to my FTP files and changed the atahualpa settings, but wasn’t seeing results on the blog itself. After tinkering with it for a good long while, I realized that my file host (GoDaddy) had several folders labelled “wp-content” and “images.” I don’t know why there were several folders, but there they were. So I inserted the images into each folder until I found the “real” folder, the one that actually affected the blog. And then I deleted the junk folders.
Hope this helps. It can’t be a very common problem . . . I hope.