Make sure your script is CHMOD'ded to 0755. A script won't run if it is set to 0777
Use your FTP client or cPanel File Manager to do this.
As daniel15 said, that 500 error is most likely a permission problem. Some settings regarding this have been changed a while ago. This causes insecure permissions to give a 500 error instead of being executed.
I changed it to 0755 but it still wont work...
You need to make sure that if you make a temporary file or something similar, that the permissions are ok.
Please give us more details if you want to get more help.
If I'm not mistaken, this feature has been disabled on this server because it's quite easy to abuse (happened already).
And, by the way, how can an image file execute scripts?
its very easy to make an image file have scripts.
all you have to do is make it a php image file or anything of that sort.
using a tunnel will allow me to disable the image if it is not a jpg, png, gif, or other image extension.
Since you're getting an 'Internal Server Error', check your error log via cPanel or DirectAdmin. It should say what the error actually is.