Guys are you all sure its the whatsapp problem? I have the same problem, its actually our camera problem on the 1520. To check this, check the file size of the pictures you take via your PC. Mine shows less than 40kb per pic!!! Yes 20MP camera taking VGA quality photos. It looks ok on our screens but when whatsap compressors it further then the small pics happen. I think the latest 8.1 update ( the 2nd one) screwed up the camera module for 1020 and 1520.
Be searching the net for fixes, soft reset done. Nothing, praying microsoft will acknowledge can fix this ASAP!