Thank you for this bug report. To properly diagnose the problem, we
need a short but complete example script to be able to reproduce
this bug ourselves. 

A proper reproducing script starts with <?php and ends with ?>,
is max. 10-20 lines long and does not require any external 
resources such as databases, etc.

If possible, make the script source available online and provide
an URL to it here. Try to avoid embedding huge scripts into the report.

I use this script to convert images to JPEG with resizing when needed. When a MPEG file is given to imagecreatefromstring(), $source doesn't return false and I get an images($source) of 1 and a imagesy($source) of ~7000. When creating the new resized image with imagecreatetruecolor, the ratio is huge and an image of about 2.5 GB is created in memory. 

<?php

if ( isset( $_GET['width'] ) )
        $width = $_GET['width'];
else
        $width = 0;

        $source = imagecreatefromstring( file_get_contents('1.mpg')  );

        if ($source)
        {
                if ( $width )
                {
                        $ratio = $width / imagesx( $source );

                        $resized = imagecreatetruecolor( $width, $ratio * imagesy( $source ) );

                        imagecopyresampled( $resized, $source, 0, 0, 0, 0, $width, $ratio * imagesy( $source ), imagesx( $source ), imagesy( $source ) );

                        $source = $resized;
                }

                ob_start();
                        imagejpeg($source);
                        $photo = ob_get_contents();
                ob_end_clean();

                header( 'Content-type: image/jpeg' );
                echo $photo;
        }
?>

Looks like you're using MPEG-JPEG codec and libgd detects your file as JPEG image. I'm not sure if anything can be done about it, but it's definitely not PHP problem.