From the AP story 'Marines reopen photo probe':

The Marines have reopened an investigation into a photograph circulating on the Internet that depicts a reservist with Iraqi children and a sign saying the serviceman killed one boy's father and impregnated the boy's sister.

The reservist under investigation, Lance Cpl. Ted J. Boudreaux, has told investigators that the photograph was doctored, Marine Reserve spokesman Capt. Jeffrey Pool said Monday.

Muslim civil rights groups had complained that the picture is demeaning to Iraqis, and demanded that the soldier be punished if the image is genuine.

To assist in the investigation, the Marines have retained the help of imaging experts from the Naval Criminal Investigative Service.

"Because this is so specialized, we're going to have to seek outside help," Pool said.

The Marines announced last week that the probe was complete, but said Monday that it had been reopened, with investigators focusing on the authenticity of the image.

Previous coverage starts here.

UPDATE: The Marines Corps Times informs us: "...Boudreaux maintained throughout the investigation that the photo was altered by someone else." (latter link via this)