diff --git a/frappe/core/doctype/file/file.py b/frappe/core/doctype/file/file.py
index cff12ba877..8d5dc8b5e9 100644
--- a/frappe/core/doctype/file/file.py
+++ b/frappe/core/doctype/file/file.py
@@ -16,6 +16,12 @@ from frappe.utils.nestedset import NestedSet
 from frappe.utils import strip
 import json
 import urllib
+from PIL import Image, ImageOps
+import os
+import requests
+import requests.exceptions
+import StringIO
+import mimetypes, imghdr
 
 class FolderNotEmpty(frappe.ValidationError): pass
 
@@ -119,9 +125,6 @@ class File(NestedSet):
 		self.delete_file()
 
 	def make_thumbnail(self):
-		from PIL import Image, ImageOps
-		import os
-
 		if self.file_url:
 			if self.file_url.startswith("/files"):
 				try:
@@ -132,12 +135,24 @@ class File(NestedSet):
 
 			else:
 				# downlaod
-				import requests, StringIO
 				file_url = frappe.utils.get_url(self.file_url)
 				r = requests.get(file_url, stream=True)
-				r.raise_for_status()
+				try:
+					r.raise_for_status()
+				except requests.exceptions.HTTPError, e:
+					if "404" in e.args[0]:
+						frappe.msgprint(_("File '{0}' not found").format(self.file_url))
+
+					raise
+
 				image = Image.open(StringIO.StringIO(r.content))
 				filename, extn = self.file_url.rsplit("/", 1)[1].rsplit(".", 1)
+
+				mimetype = mimetypes.guess_type(filename + "." + extn)[0]
+				if mimetype is None or not mimetype.startswith("image/"):
+					# detect file extension by reading image header properties
+					extn = imghdr.what(filename + "." + extn, h=r.content)
+
 				filename = "/files/" + strip(urllib.unquote(filename))
 
 			thumbnail = ImageOps.fit(
@@ -192,6 +207,7 @@ class File(NestedSet):
 			delete_file_data_content(self, only_thumbnail=True)
 
 	def on_rollback(self):
+		self.flags.on_rollback = True
 		self.on_trash()
 
 def on_doctype_update():
diff --git a/frappe/utils/nestedset.py b/frappe/utils/nestedset.py
index da69c5a47e..b1e86197dc 100644
--- a/frappe/utils/nestedset.py
+++ b/frappe/utils/nestedset.py
@@ -201,7 +201,15 @@ class NestedSet(Document):
 			frappe.throw(_("Cannot delete {0} as it has child nodes").format(self.name), NestedSetChildExistsError)
 
 		self.set(self.nsm_parent_field, "")
-		update_nsm(self)
+
+		try:
+			update_nsm(self)
+		except frappe.DoesNotExistError:
+			if self.flags.on_rollback:
+				pass
+				frappe.message_log.pop()
+			else:
+				raise
 
 	def before_rename(self, olddn, newdn, merge=False, group_fname="is_group"):
 		if merge: