Hi all,

Most possible reason of the issue is that image is big - Chris is right resolution in pixels affects lot to it not size in mb.
So server doesn't have enough memory to handle it: there are some resize processes which require a lot of server memory.
Try to enlarge memory_limit option of the server, and it will work. Better to set it to 256Mb or 512.

If you still have the problem after this please submit a ticket we will look into the problem.