I have changed the names (decreased by one character) of the figures that were given me problems and they are now previewing fine!!!
Clarification: it works when Lyx path points to Matlab gs. When I change path to the "official" gs the preview stops working.
I have installed matlab after my original version of gs was installed. However, I think I have updated gs at the time I installed 1.4.2. It looks like with the old versions of lyx, Matlab's gs was always used as it was installed later, while with 1.4.2 the new version of gs is the default and that version is not compatible with the matlab for some reason.
Leo
