Paul, I've had the same problem for almost a month now. Happened just out of the blue after years of no problems. There is a work-around though. At the top of the page click on "settings"...towards the bottom on the left there are two settings for "Attachments". If you have the "Enhanced" checked, choose the other method, save and go back and retry uploading. It should work now.
The problem with this method is that if you have, let's say, 8 images that need to be in a certain order. . .many times, even if you upload them in the proper order, once they are uploaded they're all out of order and with this upload method you can't do anything to rearrange them. So you have to go back to "settings". . .check the "Enhanced" method, then go back and move your images around till they're in the proper order. Pain In The Butt!!