SgtSling, I had the same problem. You have to move the avatars from their storage in the database to the file system.
You do that by going here.... AdminCP -> Avatars -> User Picture Storage Type -> Go
If that alone didn't do it, then you can try and rebuild the custom avatars through AdminCP -> Maintenance -> Update Counters -> (Look for rebuild custom/avatars option)
Hope that helps
Jaxel, you might want to put that in the directions or on the 2nd post (which I haven't checked, so it may be there already

) to help with it.