A way that you could test to see if the format is the problem would be to edit your upload server behavior and take off the web images only restriction. When you test it again if it is the file format that is the problem you should be able to upload the images directly. Being that you can do it in Explorer it seems to me that it is not the script that is preventing the image from being uploaded but your browser or the OS. This quick test should shed some more light on it though.