user13921: What's being reported on the news is that millions of Bitcoins were stolen from Mt Gox.  But the Bitcoin Foundation blog says something different:
https://bitcoinfoundation.org/blog/?p=422

"Somebody (or several somebodies) is taking advantage of the transaction malleability issue and relaying mutated versions of transactions. This is exposing bugs in both the reference implementation and some exchange’s software.
We (core dev team, developers at the exchanges, and even big mining pools) are creating workarounds and fixes right now. This is a denial-of-service attack; whoever is doing this is not stealing coins, but is succeeding in preventing some transactions from confirming. It’s important to note that DoS attacks do not affect people’s bitcoin wallets or funds."

So is the transaction malleability issue Mt Gox is suffering from just a denial-of-service attack, or were Bitcoins actually stolen?
Any help would be greatly appreciated.
Thank You in Advance.

user13866: 
Were bitcoins actually stolen

Almost certainly yes.
Update (March 21 2014): 200,000 bitcoin were found recently down the back of an old MtGox sofa (more or less) So some of the bitcoins might have been merely carelessly mislaid. No one has suggested that these bitcoins may have been deliberately hidden by an insider for later retrieval. So far it's reported as incompetence rather than criminal theft. That still leaves a much larger number of bitcoins that currently appear to have been stolen.
Forbes reports

The company’s shutdown is rumored to be caused by a “hack” or “security breach” that resulted in a loss up to 744,000 BTC or $409,200,000. 

The BBC reports

An estimated 744,000 bitcoins - about $350m (£210m) - are believed to have been stolen thanks to a loophole in Tokyo-based MtGox's security.
  ...
  A leaked report - which Mr Karpeles has confirmed is authentic - said the huge theft had made MtGox insolvent.

The leaked report referred to  says

At this point 744,408 BTC are missing due to malleability-related theft which went unnoticed for several years. The cold storage has been wiped out due to a leak in the hot wallet
  ...
  MtGox's main problems are massive robbery and poor bitcoin accounting.


Yahoo news reports (on 2014-02-28)

CEO Mark Karpeles appeared before Japanese TV news cameras, bowing deeply. He said a weakness in the exchange's systems was behind a massive loss of the virtual currency involving 750,000 bitcoins from users and 100,000 of the company's own bitcoins. That would amount to about $425 million at recent prices.
  ...
  It remains unclear if the missing bitcoins were stolen, voided by technological flaws or both.

Bloomberg reports

“The company believes there is a high possibility that the Bitcoins were stolen,” Mt. Gox said in a statement.


user-1: What has been reported for the past two weeks or so is an issue called transaction (id) malleability: A hash calculated from each bitcoin transaction, the transaction id or txid, can be changed until the transaction is confirmed in the blockchain, by third parties. This deviates from the intuitive, and presumably intended, behavior. Any attempt to spend unconfirmed transactions is vulnerable to a denial-of-service attack where the attacker tries to change the transaction id, denying future spending until the spender updates his idea of what happened to his wallet with the blockchain and re-issues those transactions that build on a wrong expectation of what transaction id would be incorporated into the blockchain. Large bitcoin services' hot wallets with their high transaction volume are particularly likely to be vulnerable, since before this issue became known, it would have been very natural to simply keep producing transactions building upon unconfirmed prior transactions.
To turn this denial-of-service attack into something more like a theft requires some social engineering. In the denial-of-service attack, the attacker can potentially force the wallet operator to 
reduce the rate of his bitcoin transactions to one per new block and bitcoin address, all whilst in a sense hiding the occasional successful transaction because it confirms under an unexpected, changed transaction id. If an attacker can use these circumstances to convince the service provider that he did not receive a bitcoin payment he is entitled to (possibly pointing to the wrong original transaction id), he may be able to trick the service provider into initiating a new transaction. And maybe a third one or even more. This may have happened to MtGox.
For a longer and colorful description of this hypothesis, see the question Wouldn't the “malleable transaction” attack be foiled by common sense?.

user5757: As I understand it (and wrote at more length in this question), the statement is technically correct but incomplete.
The result of a malleable transaction attack is that the targeted transaction (in which the victim voluntarily sent coins to the attacker) does not confirm, but an equivalent transaction with a different ID does confirm.  It is true that this does not steal any coins: the recipient gets the same coins they were already getting.
The theft occurs in the next step, not described in your statement: the attacker points out to the victim that the original transaction didn't confirm, and convinces him to resend the amount, in a new and independent transaction.  If the victim doesn't notice the attacker's equivalent transaction, he might do this; then the attacker has received twice as many coins as he was supposed to.

13921: <p>What's being reported on the news is that millions of Bitcoins were stolen from Mt Gox.  But the Bitcoin Foundation blog says something different:</p>

<p><a href="https://bitcoinfoundation.org/blog/?p=422" rel="nofollow">https://bitcoinfoundation.org/blog/?p=422</a></p>

<blockquote>
  <p>"Somebody (or several somebodies) is taking advantage of the transaction malleability issue and relaying mutated versions of transactions. This is exposing bugs in both the reference implementation and some exchange’s software.</p>
  
  <p>We (core dev team, developers at the exchanges, and even big mining pools) are creating workarounds and fixes right now. This is a denial-of-service attack; whoever is doing this is not stealing coins, but is succeeding in preventing some transactions from confirming. It’s important to note that DoS attacks do not affect people’s bitcoin wallets or funds."</p>
</blockquote>

<p>So is the transaction malleability issue Mt Gox is suffering from just a denial-of-service attack, or were Bitcoins actually stolen?</p>

<p>Any help would be greatly appreciated.</p>

<p>Thank You in Advance.</p>
 13866: <blockquote>
  <p><strong>Were bitcoins actually stolen</strong></p>
</blockquote>

<p>Almost certainly yes.</p>

<p><strong>Update</strong> (March 21 2014): 200,000 bitcoin were found recently <a href="http://www.theregister.co.uk/2014/03/21/mtgox_finds_200000_bitcoin_in_old_wallets/" rel="nofollow">down the back of an old MtGox sofa (more or less)</a> So some of the bitcoins might have been merely carelessly mislaid. No one has suggested that these bitcoins may have been deliberately hidden by an insider for later retrieval. So far it's reported as incompetence rather than criminal theft. That still leaves a much larger number of bitcoins that currently appear to have been stolen.</p>

<p>Forbes <a href="http://www.forbes.com/sites/cameronkeng/2014/02/25/bitcoins-mt-gox-shuts-down-loses-409200000-dollars-recovery-steps-and-taking-your-tax-losses/" rel="nofollow">reports</a></p>

<blockquote>
  <p>The company’s shutdown is rumored to be caused by a “hack” or “security breach” that resulted in a loss up to 744,000 BTC or $409,200,000. </p>
</blockquote>

<p>The BBC <a href="http://www.bbc.co.uk/news/technology-26352442" rel="nofollow">reports</a></p>

<blockquote>
  <p>An estimated 744,000 bitcoins - about $350m (£210m) - are believed to have been <strong>stolen</strong> thanks to a loophole in Tokyo-based MtGox's security.<br>
  ...<br>
  A leaked report - which Mr Karpeles has confirmed is authentic - said the huge theft had made MtGox insolvent.</p>
</blockquote>

<p>The <a href="http://www.scribd.com/doc/209050732/MtGox-Situation-Crisis-Strategy-Draft" rel="nofollow">leaked report referred to</a>  says</p>

<blockquote>
  <p>At this point 744,408 BTC are missing due to malleability-related <strong>theft</strong> which went unnoticed for several years. The cold storage has been wiped out due to a leak in the hot wallet<br>
  ...<br>
  MtGox's main problems are massive <strong>robbery</strong> and poor bitcoin accounting.</p>
</blockquote>

<hr>

<p>Yahoo news <a href="http://news.yahoo.com/tokyo-bitcoin-exchange-files-bankruptcy-102841684--finance.html" rel="nofollow">reports</a> (on 2014-02-28)</p>

<blockquote>
  <p>CEO Mark Karpeles appeared before Japanese TV news cameras, bowing deeply. He said a weakness in the exchange's systems was behind a massive loss of the virtual currency involving 750,000 bitcoins from users and 100,000 of the company's own bitcoins. That would amount to about $425 million at recent prices.<br>
  ...<br>
  It remains unclear if the missing bitcoins were <strong>stolen, voided by technological flaws or both</strong>.</p>
</blockquote>

<p>Bloomberg <a href="http://www.bloomberg.com/news/2014-02-28/mt-gox-exchange-files-for-bankruptcy.html" rel="nofollow">reports</a></p>

<blockquote>
  <p>“The company believes there is a high possibility that the Bitcoins were <strong>stolen</strong>,” Mt. Gox said in a statement.</p>
</blockquote>
 -1: <p>What has been reported for the past two weeks or so is an issue called transaction (id) malleability: A hash calculated from each bitcoin transaction, the transaction id or txid, can be changed until the transaction is confirmed in the blockchain, by third parties. This deviates from the intuitive, and presumably intended, behavior. Any attempt to spend unconfirmed transactions is vulnerable to a denial-of-service attack where the attacker tries to change the transaction id, denying future spending until the spender updates his idea of what happened to his wallet with the blockchain and re-issues those transactions that build on a wrong expectation of what transaction id would be incorporated into the blockchain. Large bitcoin services' hot wallets with their high transaction volume are particularly likely to be vulnerable, since before this issue became known, it would have been very natural to simply keep producing transactions building upon unconfirmed prior transactions.</p>

<p>To turn this denial-of-service attack into something more like a theft requires some social engineering. In the denial-of-service attack, the attacker can potentially force the wallet operator to 
reduce the rate of his bitcoin transactions to one per new block and bitcoin address, all whilst in a sense hiding the occasional successful transaction because it confirms under an unexpected, changed transaction id. If an attacker can use these circumstances to convince the service provider that he did not receive a bitcoin payment he is entitled to (possibly pointing to the wrong original transaction id), he may be able to trick the service provider into initiating a new transaction. And maybe a third one or even more. This may have happened to MtGox.</p>

<p>For a longer and colorful description of this hypothesis, see the question <a href="https://bitcoin.stackexchange.com/questions/22104/wouldnt-the-malleable-transaction-attack-be-foiled-by-common-sense">Wouldn't the “malleable transaction” attack be foiled by common sense?</a>.</p>
 5757: <p>As I understand it (and wrote at more length in <a href="https://bitcoin.stackexchange.com/questions/22104/wouldnt-the-malleable-transaction-attack-be-foiled-by-common-sense">this question</a>), the statement is technically correct but incomplete.</p>

<p>The result of a malleable transaction attack is that the targeted transaction (in which the victim voluntarily sent coins to the attacker) does not confirm, but an equivalent transaction with a different ID does confirm.  It is true that this does not steal any coins: the recipient gets the same coins they were already getting.</p>

<p>The theft occurs in the next step, not described in your statement: the attacker points out to the victim that the original transaction didn't confirm, and convinces him to resend the amount, in a new and independent transaction.  If the victim doesn't notice the attacker's equivalent transaction, he might do this; then the attacker has received twice as many coins as he was supposed to.</p>
