Hi Pam,
Our apologies for not responding sooner. We must’ve overlooked your post. I’m sorry to read that you’re experiencing problems getting our plugin to work. Lets see if we can find out what’s going wrong.
When you add an image to WordPress it will use the async-upload.php file to upload the file to your WordPress site. Normally, when no processing would take place this happens quite quickly. However, with our plugin enabled, after uploading the image and all configured image sizes will be compressed. This process might take a while, and various reasons can cause it to fail. The error itself isn’t saying enough for us to immediately know what’s going wrong as you mentioned that the file exists but there are a few things you can try to see what’s going on.
Some questions that might help us move in the right direction to finding a solution, are you getting this for all images you’re trying? Are you immediately getting this error, or does it take a while before you get it? Are the images you’re uploading large in file size? Do you have many image sizes configured to be compressed?
It will also help to enable WP_DEBUG_LOG, and check what kind of errors are written to debug.log. It would be really helpful if you can share that with us. Thanks!