Since the update, the local image mirror for federated images seems to be broken. The default web client however still tries to load the full-resolution images from the local mirror, leading to requests to the local mirror returning the default broken-image image. Please either fix the local mirror or have the web client load the federated images directly.
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I believe the reason why images are bugged in the web client, is that the web client is bugged. https://github.com/LemmyNet/lemmy-ui/issues/2942