This is a problem with slower servers. In the most cases, there is a problem with resizing images. GDN theme using standard WordPress functions for this. You can skip the resizing by adding this line into your wp-config.php.
define('JAW_SKIP_RESIZING_IMAGES', true);
But bear in mind, that after demo installation, your images will not look correct.
This error can be shown on multisite WordPress installation.
Please go to Network Settings and add “ico” to Upload file types.