May have found the solution
I did a test over the weekend using my home laptop.
I use Macs. At work I use Dreamweaver CS5 but my laptop is still on CS4.
When I tried to replicate the problems I was getting the same result until I removed the Web Assist Validation folder, then let CS4 add the files back by clicking the WA Server Validations from the server behaviors.
I then changed:
$WAFV_Errors .= WAValidateFE(((isset($_FILES["newsImage"]))? preg_replace('/^.*\./', '', $_FILES["newsImage"]["name"]) :"") . "",".gif, .jpg, .jpeg, .png",false,3);
to:
$WAFV_Errors .= WAValidateFE(((isset($_FILES["newsImage"]))?$_FILES["newsImage"]["name"]:"") . "",".gif, .jpg, .jpeg, .png",false,3);
And the validation worked perfectly.
So, I just did the same on my work computer and everything is now fine. Maybe the files in the Validation folder got corrupted.