JarretC, thanks, I tried your suggestion and deactivated all my plugins and it still does not upload my images. No change.
Krishna, as I stated in my OP, I tried both uploaders and I have also asked my host to check server settings, whose reply I posted in my OP. It takes about 5 seconds to upload one of my images–not 60 seconds. I see the blue progress bar go across and I get the HTTP error BEFORE the “crunching” indicator is shown. My issue isn’t with the speed of the upload, but that I can’t upload my images at all (unless I make them tiny).
Thanks for the replies!