The picture circulating of Michael Phelps with a bong is going to hurt him with one sponsor at least. Cereal giant, Kellogs, says they're done with the swimmer after the scandal.

"We originally built the relationship with Michael, as well as the
other Olympic athletes, to support our association with the U.S.
Olympic team," a company spokeswoman says in a statement. "Michael's
most recent behavior is not consistent with the image of Kellogg. His
contract expires at the end of February and we have made a decision not
to extend his contract."

Michael is also suspended from competition for three months, and won't receive any financial support from the U.S. Olympic Committee during that time. Phelps' rep says,

He "accepts these decisions and understands their point of view."

"He feels bad he let anyone down. He's also
encouraged by the thousands of comments he's received from his fans and
the support from his many sponsors. He intends to work hard to regain
everyone's trust." 

Is Kellogs making the right decision here, or should they give him another chance?

Photo by Splash.

Okay, I admit, when I heard the amazing Olympic gold medalist Michael Phelps' new girlfriend was a Las Vegas cocktail waitress, I was, well, pretty surprised.  Especially when I heard that he took her home for the holidays to meet his family.  It turns out there's more to Carolyn "Caz" Pal than meets the eye. 

Her high school classmates reveal that she's the last person they thought would end up in Vegas!

'She was a sweet girl, but she was a nerd,' says a friend from Caz's
days at Victor Valley High School in Victorville, Calif. 'She was
president of our freshman class and a real go-getter with excellent
grades. The last thing I ever imagined her doing was becoming a
cocktail waitress in Las Vegas!' "

Really?! Caz had a very different dream for herself when she was graduating, according to what she wrote in her high school yearbook.

'Carolynn hopes to have a scholarship to get her into a good college.
After college, she hopes to get a good job and lead a good life,' she
wrote."

Then she took off for Vegas, posed for some risque photos, and, as one high school friend told Star, "I was shocked when I was told she had had a boob job!"

(And of course, this is from Star, so who knows what's true and what's not?)

Now I guess people are shocked again that Caz is dating an athlete so talented he made history at the Olympics!  This 26-year-old is having quite a life so far.  

And maybe it was her "sweet" but "nerd" ways that appealed to Michael?  What do you think?

Photos by Bauer Griffin