PIL works perfectly for me on Python 2.7 on Linux with the latest libpng and libjpeg libraries. I've used it for a ton of projects and it has never let me down.
If you want a replacement for PIL, try out ImageMagick. It isn't a Python module, but it is a universal CLI image manipulation program that can do almost anything. Image rotation, format conversion, drop shadows, Fourier transforms, arbitrary matrix transforms.
I've bundled it as a portable executable for Bindery here
along with a ton of other CLI utilities, so you can incorporate it into your Django project via a subprocess.Popen() call pretty easily.