Okay. I just opened my *backup* file and put the character + .ani back in and lo and behold...It works now...
I don't know why, but then I put it back in the old folder, and it worked again...wtf?
Try using a backup or downloading a new 1.30.4 r495 and put the character file in there and it should work
One question though, Does WM read .gif images? If it does, then why the f**k am I changing them to ani files for?