[Nexus 4 Android Development] Johncrist1988:
You're correct, the issue is an L related issue with the bug report located here -- It's been escalated to the Hangouts team and appears to be caused by a gateway timeout issue that's affecting all carriers:

*disclaimer: not my logcat, it's copied from the link above:

07-01 17:44:53.800 13525-22426/? E/Babel﹕ HttpUtils(mms): error response --
statusCode=504
reason=Gateway Time-out
token=-1
url=http://tf-mmsc.syniverse.com:80/?msgid=000_032b815be611411e_1
method=GET
isProxySet=true
proxyHost=proxy.mobile.att.net
proxyPort=80
header: Accept=*/*, application/vnd.wap.mms-message, application/vnd.wap.sic
header: x-wap-profile=http://gsm.lge.com/html/gsm/Nexus5-M10.xml
header: Accept-Language=en-US
07-01 17:44:53.800 13525-22426/? E/Babel﹕ HttpUtils(mms): Url: http://tf-mmsc.syniverse.com:80/?msgid=000_032b815be611411e_1
HTTP error: Gateway Time-out
07-01 17:44:53.802 13525-22426/? E/Babel﹕ MmsSendReceiveManager: MMS HTTP request failed with exception for addr=proxy.mobile.att.net/172.26.39.1 apn=APN[rowId=-1|mmsc=http://mmsc.mobile.att.net|raw mmsc=http://mmsc.mobile.att.net|proxy=proxy.mobile.att.net|raw proxy=proxy.mobile.att.net|port=80|raw port=80|numeric=null|name=null|mcc=null|mnc=null|raw apn|current=0]
07-01 17:44:53.802 13525-22426/? E/Babel﹕ java.io.IOException: HTTP error: Gateway Time-out
at cx.a(SourceFile:335)
at cx.a(SourceFile:308)
at com.google.android.apps.babel.sms.MmsSendReceiveManager.a(SourceFile:429)
at com.google.android.apps.babel.sms.MmsSendReceiveManager.a(SourceFile:372)
at com.google.android.apps.babel.sms.q.a(SourceFile:424)
at com.google.android.apps.babel.protocol.ServerRequest$RetrieveMmsRequest.a(SourceFile:1258)
at com.google.android.apps.babel.realtimechat.dt.b(SourceFile:880)
at com.google.android.apps.babel.realtimechat.du.run(SourceFile:1068)
Caused by: java.io.IOException: HTTP error: Gateway Time-out
at cx.a(SourceFile:297)
at com.google.android.apps.babel.sms.MmsSendReceiveManager.a(SourceFile:429)
at com.google.android.apps.babel.sms.MmsSendReceiveManager.a(SourceFile:372)
at com.google.android.apps.babel.sms.q.a(SourceFile:424)
at com.google.android.apps.babel.protocol.ServerRequest$RetrieveMmsRequest.a(SourceFile:1258)
at com.google.android.apps.babel.realtimechat.dt.b(SourceFile:880)
at com.google.android.apps.babel.realtimechat.du.run(SourceFile:1068)
07-01 17:44:53.809 13525-22426/? E/Babel_RequestWriter﹕ RetrieveMmsRequest: failed to retrieve message com.google.android.apps.babel.sms.MmsTemporaryFailureException: MMS HTTP request failed: java.io.IOException: HTTP error: Gateway Time-out
07-01 17:44:53.810 13525-22426/? E/Babel_RequestWriter﹕ com.google.android.apps.babel.sms.MmsTemporaryFailureException: MMS HTTP request failed: java.io.IOException: HTTP error: Gateway Time-out
at com.google.android.apps.babel.sms.MmsSendReceiveManager.a(SourceFile:474)
at com.google.android.apps.babel.sms.MmsSendReceiveManager.a(SourceFile:372)
at com.google.android.apps.babel.sms.q.a(SourceFile:424)
at com.google.android.apps.babel.protocol.ServerRequest$RetrieveMmsRequest.a(SourceFile:1258)
at com.google.android.apps.babel.realtimechat.dt.b(SourceFile:880)
at com.google.android.apps.babel.realtimechat.du.run(SourceFile:1068)