Joomla 1.5 trojan Dropper.Generic_c.PTZ

While installing a joomla 1.5 site locally AVG popped up with a virus found.
trojan_dropper

It appears to be a “.gif” that is wrapped or renamed. It caused the website to not save content when it was being added or updated.

I found the file in the root of the Joomla install and also in the /images folder. It looked like this.

Solution: AVG quarantined the tojan and I upgraded the Joomla install to version 3.

I found more info on the virus here.
http://forums.avg.com/us-en/avg-forums?sec=thread&act=show&id=212215