Hi

I was able to fix the issue. Following are the steps of error occurence and fixing:

a. Everything in the application was working fine, and all of a sudden one day Image Upload functionality started giving "http error 2". 

b. I was able to find http error 2: only listed in core.js

c. The only thing that I can do is to go through all the changes that I have made in past few days. After checking all the changes, I was able to only identify one change which potentially could cause this issue. 

d. The change was related to Compression Attribute that I added to the MVC Controller so that the result could be compressed. 

e. On Ajax call in Upload functionality, it was causing the issue during compression. 

f. The fix was to remove my Custom Compression action filter for the Ajax Handler of Rich Text Editor. The change worked and upload functionality started working again. 

http error 2: was certainly of no help :-(. Just wanted to share the above if it helps anyone who faces this or similar issue.  

Raghav