Images are being uploaded now but are still showing up as a missing image in Elgg.  Yes, I increased limits in Elgg's htaccess file as well.  I'm not too worried about the Captcha at the moment.  I'll go through and disable other plugins I've added to see what happens.  Thanks in advance for the help. 

I just went and disabled all plugins I added and images are working.  I will activate plugins one at a time to find out which one it is and post it here for others to take notice of.

Found it!  The plugin Did You Know? 1.0b was the cause.  I'm not too worried about updating that plugin as I don't really need it but thought it would come in handy.