Dear Sir,
Thanks fo posting Magento related project.
Before i commit on your project, i need to know which cache plugins you are using in your magento website. Also, If you using any cache plugins, then you need to disable all of them.
Your 500 error query is highly related with the Cache. I can also make the image quality 100% in product grid. Magento default product image quality is 60%. Any ways, I need to check the backend and frontend both. Also i require full access of Cpanel.
Waiting for your kind reply,
-Rudraraj