JPEG Library Reports Unrecoverable Error

An image gallery script that worked with earlier versions of PHP
started generating this message once we upgraded to 4.3.*. --I've tried
installing everything from 4.3.1 to RC2 of 4.3.3, and they all have the
same problem.

Has something changed in the way PHP handles jpegs? Can someone point to
the error in the script below? Any and all help would be appreciated

My php configure options include gd and jpeg libraries:
[
--with-mysql=/etc/mysql --with-xml --with-apache=../apache_1.3.28
--enable-track-vars --with-gd --with-zlib-dir=/usr/local
--with-jpeg-dir=/usr --with-png=/usr/local --with-curl=/usr/local
--with-openssl=/etc/ssl --with-swf=usr/local
]

Also,
<?
var_dump(gd_info());
?>

shows this:

array(10) { ["GD Version"]=> string(27) "bundled (2.0.15 compatible)" ["FreeType Support"]=> bool(false) ["T1Lib Support"]=> bool(false) ["GIF Read Support"]=> bool(true) ["GIF Create Support"]=> bool(false) ["JPG Support"]=> bool(true) ["PNG Support"]=> bool(true) ["WBMP Support"]=> bool(true) ["XBM Support"]=> bool(true) ["JIS-mapped Japanese Font Support"]=> bool(false) }

The part of the script that's causing problems is below:

==================================================
==
$today=date("dmy");
$image_name = $today . "_" . $image_name;
$destination ="./images/" . $image_name;
$thumbnail = "./images/thumb_" . $image_name;
$MAX_WIDTH = 175;
$MAX_HEIGHT = 150;


if (is_uploaded_file($HTTP_POST_FILES['image']['tmp_n
ame'])) {
copy($HTTP_POST_FILES['image']['tmp_name'], "./images/" .
$image_name);
} else {
echo "Well, that didn't work";
}


$thumb = ImageCreateFromJPEG($destination);
if (!$thumb) {
echo "oops, didn't work!";
} else {
$size = GetImageSize($destination);


if (($size[0] / $size[1]) > ($MAX_WIDTH / $MAX_HEIGHT))
$modifier = $MAX_WIDTH / $size[0];
else $modifier = $MAX_HEIGHT / $size[1];


$image_copy = @imagecreatefromjpeg ($destination);
$thumbnail_memory = @ImageCreate ($size[0] * $modifier, $size[1] *
$modifier);
imagecopyresized ($thumbnail_memory, $image_copy, 0, 0, 0, 0,
$size[0] * $modifier,
$size[1] * $modifier, $size[0], $size[1]);
imagejpeg ($thumbnail_memory, $thumbnail);

==================================================
==

This last line is where the script dies with the error:
imagejpeg(): gd-jpeg: JPEG library reports unrecoverable error.

Any thoughts or assistance with this would be greatly appreciated!

Even have tried configuring PHP after installing GD manually, and then
adding the parent directory of GD to the configure script just in case
that was the issue.

Thanks!