Jay, the reason your avatar didn't go anywhere is because you were grandfathered in. Some of the older members that had avatars before the rule changed were allowed to keep their avatar free of charge.

As for why you didn't get an e-mail notification is beyond me and only the site admin could answer.

 

I've always had "receive mail from admin" checked off and never received an e-mail.

I did get a pop-up message last year.

A weird thing just happened when I went to the User CP.
I was already logged in to the site, clicked the User CP link and had to log in again. Never seen that before.