I don't think it's even trying to upload, though.
I just tried with another image (one of my forum Avatars which is well under the suggested size (it's 100x100) and only is 5kb, the smallest jpeg I've got), and it's still doing nothing. (I.e, when I click the "open" button, it simply closes the window.)
Normally, it takes a while, after clicking the "open" button, there is
some indication that it's started, but here, it's just sitting like shown in the attached screen shot after the pop-up window closes.
In fact, I've just noticed, there is clearly something wrong other than file size, because as I was checking again, when I clicked the "open" button, an "error on page" appears in the bottom. (I've refreshed the edit screen a couple of times, but the error message doesn't appear until I try to add a picture.)