The symptoms I get is exactly the same as you describe.
"that image uploads were being corrupted". 40pound actually doesn't refer to the image file itself been corrupted but rather the display of image in a post has gone awry.
I hope the following information helps:
- My system configuration is using Windows Vista. My blog has now amount to 130 posts with many images.
- I using Windows Live Writer (WLW), BlogJet, ScribeFire. There is no way to rename the image specifically to prevent name conflict when submitting post using those blogging tools (Correct me if I'm wrong).
- I'm using the latest version of WLW - 1128 as well.
I have captured the video and pictures that highlight the problems with the blogging tools at