Are you getting a 404 error or any other error? If you do a "View Source" or inspect element, what is the resource that it is trying to load for the post?

The journal module uses templates which are stored in this file: \DesktopModules\Journal\App_LocalResources\SharedResources.resx

Make sure that they were not altered. They should have a section like:

Hi,

sorry for the late reply, I had almost given up hope for this issue :-)

This is what I found in the Resx file:

  <value>&lt;div class="author"&gt;&lt;img src="[BaseUrl]/profilepic.ashx?userId=[JournalAuthor:Id]&amp;h=32&amp;w=32" /&gt;&lt;/div&gt;

and corresponds quite well with what you had posted

The resource that is addressed in the HTML code is:

<img src="http://localhost:20780/profilepic.ashx?userId=1&h=32&w=32" />
So it looks like everything corresponds.
I can see the avatar in the menu bar when I log in.
I had also tried a fresh and clean install of dnn 7.0.4 and even here it does not work.
there is another issue that might be linked to that: I cannot access the database in webmatrix 3. When I try to list the tables it gives an "Unable to cast object of type 'System.DBNull' to type 'System.String'