I found two solutions for this that worked for me.
The first way that worked for me was to use a different imaging library all together. I installed pgmagic and that worked fine.
sudo apt-get install libgraphicsmagick++-dev
sudo apt-get install libboost-python1.40-dev
There is also other imaging libraries available and they are all listed in the sorl-thumbnail docs:
http://sorl-thumbnail.readthedocs.org/en/latest/requirements.html
The second way that worked for me (preferred) was literally a fresh install of everything where I removed both pillow and PIL and the re-installed them starting with pillow.
pip uninstall pillow
pip uninstall PIL
pip install pillow
pip install PIL