Yep, #1 happened to me the other day. We hit our Apache server limit of 256 and the site slowed to a crawl. I'm not really sure what was causing the load to be like 50-90, but requests were quite delayed waiting for an open process (keepalive was at 5 secs).

Indeed, my first idea was indeed to install nginx for images really quick. However, I have no experience with nginx. Thankfully, we had a spare server and I offloaded the images to there for now... Throwing more hardware at the problem usually works.