I take it this issue was never resolved. Bummer!!
I can't seem to change the avatar either - no option to change image - image upload doesn't seem to allow me to upload an image either, and avatars are only shown from the default set.
Dave - I'm looking into this issue for you; I *think* I know what's causing it but want to try and determine what happened... I'll let you know when I have an update.
Dave - give it another try - you should be able to upload images and use them to change your avatar now.
Sorry for the inconvenience...