I had a similar problem today getting an image named "Priority 1.PNG" to show as a card cover. I suspected the space in the name to be problematic, but it turned out to be the uppercase 'PNG'. As soon as I renamed my file to "Priority 1.png" and uploaded it, the card immediately showed the thumbnail version and displayed it as the card cover.
I normally am a bit obsessive about my file names and rename to lowercase .png. But this morning I was lazy and left the default PNG generated by my screen grabber. Not sure if this will help your situation, but wanted to share my experience in case it does help.