Ok I am having the same problem. Mine occurred after I turned iCloud off because it was not syncing everything and it took forever to do what it was syncing. I tried sync over wifi option and turned that off as well.
Now when I look in the camera roll the pictures are pixelated, blurry, black or just appear as a white box. I can email the pics and they look fine but not upload them to Facebook.
I also noticed that my iPhone4 no longer shows up in My Computer on Windows 7.
Hello Apple Support anyone?
Download an iphoneexplorer -http://www.macroplant.com/iexplorer/download-pc.php
go to photodata folder, delete this files,
I had the exact problems that you're all describing. Pictures getting pixly/blurred, camera app crashing, and at the end I couldn't even open the picture-viewer. I found this thread and was let down, but I continued searching for a tip and was rewarded.
This fix worked like a charm:
It gives you a step by step-solution which was fairly simple to follow. Afterwards, my camera app works again just fine and I have no problems viewing my pictures.
And best of all, no restore or factory restore needed!
Good luck, best wishes from