Ijust upgraded to 7.0.4 and still not fixed.  I did a little edit in firebug  and removed the extra port number, but even after that, the image shows a broken image.  I did some reading and someone suggested that instead, edit the user.aspx.cs file to point to ProfileURL instead of UserID.  I didn't try because of a  family emergency.  I will look into it more and post what I have.

I couldn't get the ProfileURL to work, but I do have a work-around.  This is NOT a permanent solution

navigate to admin>skins>user.ascx.cs

if (ShowAvatar)
                        {
    string errString = Globals.UserProfilePicFormattedUrl();
    string correctString = errString.Replace(":80:80", ":80");
                            avatar.ImageUrl = string.Format(correctString, userInfo.UserID, 32, 32);
                            avatar.NavigateUrl = enhancedRegisterLink.NavigateUrl;
                            avatar.ToolTip = Localization.GetString("ProfileAvatar", Localization.GetResourceFile(this, MyFileName));
                            avatarGroup.Visible = true;                            
                        }
                        else
                        {
                            avatarGroup.Visible = false;
                        }

where "80" = your port number

Like I said this is NOT a permanent solution