Has anyone with OS X 10.7.5 had issues with corrupt photos?

We are suddenly experiencing an issue with our iMac where photos we have taken recently are now coming up with the image below.  They appear fine at first in the finder view but as soon as we open them they turn into the below and then others in the same folder do the same.  We copied the files to another computer and it opens the same.  Apple Support is having me do an OS reeinstall, but I want to know if others are having the same issue.

Hello Drew,
Bootup holding CMD+r, or the Option/alt key to boot from the Restore partition & use Disk Utility from there to Repair the Disk, then Repair Permissions.

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