I've been having issues uploading larger images, perhaps a limit has been put on the size of images that can be uploaded, with the unintended consequence of effecting banners. Have you tried uploading a small picture to test if it works?
That's a good suggestion, thanks! ...unfortunately I already tried that, up to and including deleting the current images completely to just start from scratch, and the UI won't let me. I even tried deleting the community - and learned that there's really no such thing(?) When you delete a community apparently it stays in the database as a deleted community, and only you can un-delete it. Not sure if that's a temporary thing, or if it's permanent, but in either case deleting that community didn't allow me to make a new one with that same name. All I could do is un-delete it, and my problem persisted.
That's probably by design. Reddit works in a similar way. On reddit, once a community is banned it can't be recreated/unbanned unless you ask the mods. So in this case it looks like they actually give you more freedom by being able to undelete it yourself if you are the one who deleted it.
As far as the issue with uploading, you might want to reach out to !yay@lemmynsfw.com
I'm having similar problem ( including not able to edit the community's info) but only with some coms while others are working.