If the thumb shows, it did upload the photo, what is happening is the script that puts the URL into the post is not running so the picture never shows. This may be a security setting in your browser or it could be the browser version. Are you running IE 10 with Win 8?
Have you tried this on Modern View, I have a different upload there which I'm still in the process of putting on classic too. It is more reliable from the stand point of these script issues. Too often, some of the browsers treat the script as something harmful. With the new upload, I've done everything I can to avoid that. It's especially reliable with IE 10 and any of the other browsers. IE 9 and below fail for many reasons.