Well does this have anything to do with your secure url enabled features or permissions on your web data directory server path etc?
There is no issue rotating an image in classifieds that I am seeing
Main Index - Reeftalk Classifieds
You can see I turned that photo on its side to show you I rotated it
My only guess here would be maybe your using GD2 to process images. You can try Imagemagick or if using GD2 maybe place at the top of your pp-inc.php file this line under the error_reporting line. My guess here is your memory is being exhausted processing an image so it is unlinked.
Code:
Content visible to verified customers only.
If you do that and continue to have an issue you can send me server access so I can go put some debug information in the files and try and determine what your problem is.