Image Loading problem in JRE 1.4

[Bijesh Krishnadas]

I have an applet which uses the drawImage method. There is a ImageObserver implementation with the following:

    public boolean imageUpdate(Image image, int i, int j, int k, int l, int i1)
    {
        if((i & 0x20) != 0)
            allBitsReceived = true;
        if((i & 0xc0) != 0)
        {
            System.out.println("*** Image load error! ***");
            allBitsReceived = true;
        }
        return !allBitsReceived;
    }

The applet works perfectly with JRE 1.3, but fails to load the background image in JRE 1.4.
Also in 1.4 the console shows the message "*** Image load error! ***"
Are there any known incompatibility between JRE 1.3 and 1.4?
Bijesh
P.S. The code is not mine. So I have no idea what is being attempted here.