Same Here.
If I upload an image to a folder located at "www.mydomain.com/secure/images".
It uploads OK.
When I select it in the editor, the URL is showing "secure/images/banner.jpg" but there is no image preview (red X). When I OK it, the image does not show in the HTML Editor, but once the form is updated, it shows on my results page. ....However HTML Editor is showing up as no image!!
If I manually edit the URL, to remove "secure/" it shows it OK in HTMLEditor, but does not show on the results page!
SOLUTION: I have to change my webassist/kfm/configuration.php file so that is reads $kfm_userfiles_output = '../../secure/images/';
I can only set the image upload to the same folder as the page I'm working in. I can't set my image upload folder to a single generic folder located outside this secure folder.... Very Annoying.!
I think this was a backward step upgrading to V3 - we won't be upgrading any other sites as it's too clumsy to use and needs constant tweaks to configure it to work on each site.