Poor thumbnail generation after installing WP 3.4

As title. Here’s an example:
Post made before 3.4:
http://blog.kgptzac.info/archives/1821
Post made after 3.4:
http://blog.kgptzac.info/archives/2370

I do not understand why there is a huge drop in jpeg image thumbnail generation quality. I tried to Google a solution, buy most of the results I found are telling me to edit image.php and media.php lines that do not exist.

I have NextGEN gallery plugin installed. I tested reupload image while that plugin deactivated; it did not help.

150, 300, 600 is the width constraint for the three levels of thumbnails in my setting. I did not touch it before or after the 3.4 upgrade. It worked perfectly until now… oh and the above two posts both uses the largest thumbnail: the 600px wide one (since in my theme 600px is the maximum width).

I fear of losing all my plugin’s settings if I am to reset my plugin folder… (at least that’s what I assume would probably happen.) I’d like to know if anyone else ran into this problem.

PS: To clarify, I had absolutely no problem with WP resizing my uploaded image within posts and displaying thumbnails with correct size and sane quality before. It only is messed up after installing 3.4.