Yes it's a problem for me now as well. It worked gine with Imagemagik on the old server but not with GD on the new one. For some reason we can upload small file size images up to about 700kbs each, but a single 2mb image just won't upload.
My hosting service, HostPapa.com allows for unlimited storage with no mention of limits on uploading.
I have three photos that have got stuck in the system that amount to around
240kbs - that should'nt cause any upload problems I would have thought.
My brother who is registered on the Photo Gallery has the same problem and he just tried to upload one photograph.
Beats me, can't find an answer anywhere.
Good Gallery you have there, some great machines.
This should assist with uploading issues and you might also want to try and downsize the max image width height parameters in admin upload options to see if this helps as well. GD2 has a issue processing larger files since it uses PHP memory and shuts PHP down when trying to process those files.