I suspect that the file you are trying to upload may be corrupt, or perhaps of the wrong format or size.
Try posting that picture here as a test. If the error comes up again, please copy the message in its entirety and post it here. Then try a different picture to test if it's file-specific.
If that doesn't work, completely clear all of your cookies, and cached history.
Your account is in full working order, and you have all the necessary privileges, so I'm No one else has ever reported this issue to us yet.