Jpg will load, resize and save, Jpeg wont't

[Teodor]

Image manipulations take a lot of memory especially with the several resize steps you have in the server action. See:

Is there a file size limit on the Image Resizing tool?

The filesize doesn’t say anything about the size a image takes in memory. The file gets stored uncompressed in memory, standard formula is width * height * 4 (every pixel takes 4bits (RGBA) in memory). You need more then just the image data if you are going to manipulate it.