IPhone now displays photo's as grey "JPG" box, but photos are corrupted.

Maybe someone can help me here.
After the update to the 5.1 iOS, my 32GB iPhone 4S is now displaying some pictures in my Camera Roll as grey boxes with "JPG" in the middle. When you select the photo, it brings up a larger version of the grey box showing the "JPG" in the middle.
I've tried to delete the photos and re-sync my phone, but each time - more pictures seem to be showing up like this. Can someone shed some light on this? Or is this a known issue?
Any assistance would be greatly appreciated. :/

I have a solution.
I had the same problem on my new iPhone 5S (iOS 7.0.3). Some photos are shown only as grey screen with characters "JPG" in center, even though those photos look fine on iPhoto 11 (ver 9.4.3)
It turned out that I had to rebuild the iPhoto Library entirely. To do it, press Command + Option while opening iPhoto and hold them until you see a dialog. The forth choice "Rebuild Database" was the right one for me. After the rebuild, connect iPhone to iTunes and sync the photos. You might have to delete all the photos first to put the fresh copy from the new library.
Hope this helps.
Yoshi

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