Use the site url
I have been having issues with the new editor aswell.
My simple solutions seemes to work fine:
1. Open kfm/configuration.php
2. Find these lines of php and duplicate them and delete or comment out the originals.
$kfm_userfiles_address = '../../userfiles';
$kfm_userfiles_output = '/userfiles/';
3. Change them to the following "userfiles is the upload path":
$kfm_userfiles_address = '../../userfiles/';
$kfm_userfiles_output = .'http://www.website.com/userfiles/';
works for me!
My site has an admin folder and the template files are in the root, the upload folder is "http://www.website.com/userfiles/"
Hope this helps