latest attempt cleaned up some:

PHP Code:
import flash.display.BitmapData;

button1.onPress = function(){
    
trace("WIDTH CHECK 1 : "+containerClip._width);
    
savePic(containerClip);
    
}


function 
savePic(mc:MovieClip) {
    var 
snapShot:BitmapData = new BitmapData(mc._widthmc._heightfalse0xFFFFFF);
    
trace("WIDTH CHECK 3 : "+mc._width);
    
snapShot.draw(containerClip);
    var 
pixels:Array = new Array();
    var 
w:Number snapShot.width;
    var 
h:Number snapShot.height;
    for (var 
0a<=wa++) {
        for (var 
0b<=hb++) {
            var 
tmp snapShot.getPixel(ab).toString(16);
            
pixels.push(tmp);
        }
    }
    
    
//send to php for image creation
    
var output:LoadVars = new LoadVars();
    
/*
    output.onLoad = function(success){
        if(!success){
            trace("PHP NOT FOUND");
        }else{
            trace("PHP SCRIPT FOUND");
        }
    }
    */
    
output.img pixels.toString();
    
output.height h;
    
output.width w;
    
output.send("http://www.dmstudios.net/demos/makepic/makePic2.php""_blank""POST");


If someone could tell me if its a AS side or PHP side problem..even that would help me to narrow down my search..

thanks