I'm assuming you are not getting the correct result with file_exists()
because you don't include the full path (even tho you define it).
Try using the following: file_exists($full_path)
Also consider using some CI helper functions for handling files like images, or uploads. They are there to make this 'easier'.
File helper:
http://ellislab.com/codeigniter/user-guide/helpers/file_helper.html