Passing global variable from one function to another not working

I’m setting up an options page and uploading an image which has to be validated.
If there’s an error I want to set a variable to pass to another function, but I can’t get it to work at all.

Essentially the code goes like this, where $banner_error is the global variable I’m trying to set. If I echo a message at that point instead of setting a variable then the message is echoed (‘headers already sent’ as well but that doesn’t matter since I’m just testing):

[Code moderated as per the Forum Rules. Please use the pastebin]

Original code from: http://blogs.sitepoint.com/wordpress-options-panel/