None of the above fixes worked for me. I have found one thing that has worked though. I have not tested this “workaround” extensively, but it looks like my problem is related to the size of the picture. My original files are 2896×1944 and I get the HTTP error when trying to upload. If I resize it to 800×537, it works fine. Anyone else run into this or anyidea if there is a size limitation?
Edit: I was just reading another post http://ww.wp.xz.cn/support/topic/164999?replies=1 and pictures that are too big are a known problem.