Badly Pixelated pictures

Pictures that I try to view in Preview & in Photos when enlarged come out very pixelated. I attempted to rotate and save one of the pictures, but that was worse because now even the icon picture of it was pixelated. It just started happening, so I'm not sure what caused it. Almost like I've run out of memory to view them properly, but I have my memory maxed out.

This is a screenshot of some of my photos. Now, let me click on the birds photo. (Center row, left column)

This is what has started happening to ALL of my photos and I don't know why. Just ran Dr. Web lite to check for viruses, but no threats found. Now I'm really confused. Any ideas? Opened up Bean (text editor) and imported a photo and it behaved normally.

I noticed it when importing photos from my camera. Once in Photos or just copied to the desktop screen and attempting to view with preview or photos, they go all catty wompus. It was after I saw this that I noticed all of my pictures I have saved are doing this. The ones in a pictures folder and the ones in my photo library.