Moved to new server, thumbnails not generating

[Jennifer2010]

Moved from Apache to NGINX from PHP 5.3 to 5.4.

When uploading pictures, thumbnails are not generated. Only a blue link which when clicked, leads to the full size image.

Images smaller than thumbnail dimensions (thus, not requiring thumbnail generation) works fine.

Tried both GD and ImageMagick and both produce the same results.

All old images/thumbnails are working.

When I go into maintenance and "Regenerate Thumbnails", every line reports "ERROR" for each image so that doesn't regenerate the ones that already exist.

We're using suexec so apparently permissions are not an issue.

FreeType Version:
Old: 2.2.1
New: 2.4.9

libJPEG Version:
Old: 6b
New: 8

libPNG Version:
Old: 1.2.10
New: 1.2.49

ANY IDEAS?

Thank you