when, in your profile, you try to upload an avatar, it keeps saying "Your avatar needs to be in .JPG .GIF or .PNG format". and trust me, i've tried them all. I am also certain it had the right size..
so I uploaded the avatar to one of my websites, and used the URL option.. et voila: it works!
maybe you could disable the upload option, or fix it.. or say I'm an idiot.