I realised that I couldn’t upload any new pics either. As I mentioned WP got upgraded and must have put whole folder structure under Store upload folder.
How to fix it:
Log into your WordPress admin dashboard
Go to Media Settings menu (Settings -> Media)
Enter wp-content/uploads in the “Store uploads in this folder” text box
Save the changes by hitting the “Save Changes” button and you are done
The important thing here is to make sure you only enter the following in the “Store uploads in this folder” field: wp-content/uploads