FF, what is your setup on your computer? Any firewalls and/ or other security programs? Got a traceroute you can post to WP.com?
With the pictures I see on your blog, I don't see why there would be an issue with them although I would suggest not having spaces within the file names as they do get their names changed upon upload. If you're not use to that, it may be a concern for you.
There is no file size limitations here that we know of. Just the 25meg total rule. I'm betting on it's something on your end or EarthLink's (Probably all the spammers getting a free ride over there) as there haven't really been any other reports of this within the forums. I'm leaning towards an issue with whatever firewall you are running locally.