Have you checked that you have all the perl modules required? AFAIR the standard captcha uses ImageMagick, which can be a bit of a dog to configure

I checked and I do have imageMagick 6.2.8 installed. I don't have GD, or Crypt though. Will that have anything to do with it?

The descriptions don't sound like they would. Crypt::DSA This module accelerates comment registration sign-ins

GD This module is needed if you would like to be able to create thumbnails of uploaded images.

Is your mt-static directory under MT_DIR and accessible from a browser? If not and you moved mt-static to somewhere else, you need to specify where it is in CaptchaSourceImageBase config directive.

http://www.movabletype.org/documentation/appendices/config-directives/captchasourceimagebase.html

To troubleshoot, you can also copy the URL of the broken image and try to load the URL in the browser. It may show MT standard error screen which should contain some useful information.

I appreciate everyone's help.. Yes, my directory is accessible via browser in the standard install..site/mt/mt-static/images/captcha-source

I am able to view the links to the images in the browser, but they all come up broken. Following your instructions to copy the url of the broken image, I do get this error message:

Image error: Exception 425: Improper image header `/hsphere/local/home/mazdakb/mazdaspeeddevelopment.com/mt/mt-static/images/captcha-source/x.png'

I'm thinking that somehow the images are getting corrupted? I have uploaded them twice.. They open fine on my desktop.. Any ideas?

I believe I fixed it.. It looks like settings in my ftp program were uploading all files as text instead of automatically sending some as binaries.. I changed it to automatic and re-uploaded the images and now it all works..

Thanks again for everyone's help.