There must be something uncommon in the JPEGs that show this problem. I "solved" the problem by opening them in the OS X Preview function and then just doing a save. After that, I could add them without the palette corruption.
I reattached the exact same JPEG as before but after I opened it and saved it.
Yes, Jaikoz gives exactly the same results as the original web posting. I thought it might be something to do with color spaces/models but I opened it in Photoshop and couldnt see anything different about the file except the new file is only 33kb whereas the original was 48kb