Have you checked out all the troubleshooting images tips found here?
http://en.support.wordpress.com/images/troubleshooting-images/ That image is HUGE! . 2,833px × 3,744px (scaled to 413px × 547px)
Delete it from the Media Libraray and upload one that "fits" into the maximum displayed image width for your theme.
Prior to uploading any image into your blog, regardless if it’s a header image, a featured image, an image in a post or page, in a Post format (Gallery or Image), an image for sidebar display in an image widget or a text widget, you can optimize and re-size it in either a desktop image editing software or online image editing software to fit the space you intend to use it in. The result will be the best image quality and you won't be wasting your media space.