Try a different browser. Perhaps it's a bug related to using Chrome. Working for me in Safari on Mac OS X 10.7.4.
Are you still seeing that? I'm using Chrome (20.01132.57) and OS 10.6.8 and am not seeing the issue.
No, I still can't upload images: http://assure.ly/MKTJzf.
I am using Mac OS 10.6.8 and Chrome Version 21.0.1180.49 beta. Since this morning I have shut down and rebooted and I am on a different network now.
I upload images for most of my posts and use this setup for posting to the forums.
Firefox is okay. Maybe it is the latest version of Chrome is the problem. It seems to have auto updated to a beta.
Basically it appears the problem is here!