Attach Screenshot feature failing for end users

We just upgraded our Jira system from Jira 4.4.5 to Jira 6.1.5. Everything went smoothly without any hiccups and in fact we are very pleased with the upgrade and the new features. However, from the past week or so after users started using the system hitting every feature in the process, the existing feature of attaching a screenshot is not working with a caveat. Some users were able to run the Java plug-in update as prompted and the popup works just fine i.e. they are able to attach a screenshot without issues. Some users are just not able to. See screenshot with the specific issue they are seeing. The users have updated their local machines to JDK7, they've uninstalled JDK7 back to JDK6 but to no avail. On systems where this feature works, we were prompted to upgrade to JDK7 and it worked without issues.

We have about 100 active users with most of them offshore and is delaying the QA process as they are now having to save the screenshots as an image and then attach it.