Image Upload issue

I have two wordpress site and i updated their version to latest which is 3.5. Now, i am unable to upload image to my site using the ADD MEDIA button from Add New Post link. So i did some research and i found that my current theme is having the issue. I tried switching to twentyeleven theme and then i was able to upload image normally but not with my current theme.

Actually its not the theme, it is the latest update having the problem. I think something has changed on the latest update. Before update everything worked fine. Now it is not working. So i am guessing that my theme’s media manager is not compatible with latest update.

I believe i was able to describe my issue clearly. Anyone else having same problem?

Any help on the issue will be appreciate.