No, we do not have any issues with jpg or png files. It seems the hosting site IT team made some changes that seem to help considerably. Here below is there response:
"We’ve reviewed the issue reported on your website and found that it was likely related to PHP’s memory limit settings not properly reflecting on the site.

To address this, we have created a .user.ini file within the root directory of your site and increased the PHP memory_limit to 2048M (2GB). This change ensures that your application has access to more memory, which can help prevent memory-related errors during operation.

At this time, no further errors are appearing in the logs, but we recommend that you test the site and let us know if you experience the same issue again. We appreciate the productive communication with the AbanteCart IT team during this process."

Thanks Basara Its fixed

Ok Thanks, I will submit this to our webhosting tech staff to see if they can make this change to the php.ini file, this is a bit out of my expertise level.
One question though as this problem surfaced with the newer 1.4.2 version and did not exist with the 1.4.1 version.
Is it safe to say this newer version came with a php.ini file with that 10mb entry in the file?

Hello.
Here is default php.ini file for 1.4.2
https://github.com/abantecart/abantecart-src/blob/master/public_html/php.ini

Ha, 10mb of memory is not enough for AbanteCart.

You should to check php directive memory_limit before run.
Make it at least 128Mb inside php.ini file Or on cPanel php configuration page.

To see actual memory_limit just go to admin->system->settings->system  button phpinfo() at the heading. 
 

error log?