I copy all my original files back to the server.
Still the same problem the captcha image is broken.
Right now it's disabled for new registrations, but I have it on every single forum for new users, so will be a pain to remove from there.
Any other ideas?

You still have the same problem going on. View the source of any forum page and you'll see the blank lines at the top.

Whatever you are using for FTP or whatever mode you're copying in is adding blank lines throughout the code and is creating the problem. You might try using a different FTP client, or maybe look at the files on your local PC and make sure they don't have the blank lines in them as well.

can you give me one file that has the problem?
I'm not a PHP expert, but if I can see the problem I will try to fix it.

Also, is there any way to try out captcha on my server (like a stand alone program), so I can rule out a problem with GD2 on my server?
ps: I'm using Filezila as my FTP program.
and sending .PHP as ASCII and .JPG as BIN

Looks like you got most of them fixed, but there are still blank lines coming from somewhere. Will poke around a bit and see if I can track it down.

Looks like the majority of your language files have the issue. The english ones seem ok, but the portuguese have the mentioned spaces before the opening php tag and throughout the files.

example: languages/portuguese/generic.php

Rick,
could be something else?
I checked and upload all Portuguese files and still the same issue.
I changed one TEST user to English and try and still not showing the captcha even if his language is English.
I can see a blank space on this file:
http://www.MY_SITE_THAT_YOU_KNOW/forum/ubbthreads.php/ubb/newpost/Board/6
(replace the mysitethatyoukno)
but I could not find where that line is coming from.
and on that page, for a NEW USER, the captcha is displayed.
any other ideas?

One blank line at the top is normal when viewing the source, you'll see it here as well.

Can you reply to your support ticket with the updated admin info. Can't seem to login as the admin with the username/pass that was submitted with the ticket.

Rick,
I submit the ticket but also I change the password back to what you had before.

Couple more info:
1) today I received the Ticket Number email from Social Strata. so it's working and it's not on my SPAM.

2) The captcha works on my server, using a diferente program (my "contact us" page use it).

thank you for looking into that.

Just as a note I use Filezilla. I use the transfer mode of auto for threads. Classic is another story unless you edit the filetypes.
Possibly you uploaded a few in binary in error. If you were switching back and forth for each file/folder.
Also I would make sure you are using a fresh extracted zip file for your version and that it overwrites all of the files if it is extracted to the same folder you have been using.

Also in filezilla it has a failed transfers tab at the bottom. check to make sure there are none. If there are then those files were not overwritten.