Photon Gateway timeout error

That’s indeed one of the limitations of Photon: if your server takes longer than 10 seconds to upload the image to Photon, the upload will time out and your image will appear to be broken.

Looking at that image, it seems to load in about 1.2 minutes in my tests:
http://i.wpne.ws/dm8E

I would suggest uploading smaller images to avoid this problem. 4.2MB is nice for an image you keep on your desktop or want to print, but it’s not recommended to use such large images on the web, as your readers most likely won’t wait more than a minute for an image to load.

Plugins like Imsanity can help you take care of the resizing as you upload the images.