In case anyone is looking for a solution to creating a whole set of custom avatars for Buddypress users to choose from I just posted directions on how to do this here: http://wordpress.org/support/topic/creating-specific-custom-avatars-with-gravity-forms?replies=1#post-5586200

It uses a paid Gravity Forms plugin - but it works (and I've been trying to do this for years so I want to share with everyone). Thanks.