TYPO3 Core

Do you have safe_mode enabled? Did you search the Bug tracker? There are a few known issues with image processing in 4.3

Yes safe_mode is enabled and worked fine with typo3 4.2 I can still setup a new site on the same server using typo3 4.2 src and all works fine. Yes have read every thing I could find regarding thumbnails in the BE. Most were "a . path to IM issue" " b. IM not installed and working". Image processing is working all image processing test pasted. or "c. older version of typo3 with a note stating that the issue was resolved in the next version."

Please have a look at #21360

The right solution is currently under discussion in core list:
http://lists.typo3.org/pipermail/typo3-team-core/2009-December/033835.html

I have looked at 0012341
This issue deals with special characters in the file name. most of my images have special characters. However I tested created new folder put image in new folder named image logo.jpg cleared cache selected new folder still no thumbnails. It does seem that graphicsmagick is hanging and turning safe_mode off does allow thumbnails to generate.

So If it is not special characters in the filename what is it ? Any ideas?

No, the problem is that the [0], which is appended to every file name is escaped twice, when safe_mode is enabled.

[0] means: Take the first frame/page of the image. This is needed for animated GIFs and PDFs and so on and appended to every image file name.

0012341_v4_4-3_trunk.patch in 0012341 resolved this for me
With safe_mode=on

Resolved with issue #21360

Commited to trunk (rev 6722)
Commited to TYPO3_4-3 (rev 6723)
Commited to TYPO3_4-2 (rev 6724)