Continued discussion from here.
WillNorthYork, jkissane_ - I now see there are three methods to add inline photos to a post, not two like I thought:
1. The camera icon on the left hand side
2. The attach icon on the right hand side
3. And the scenery icon on the text toolbar after clicking the "A" icon on the right hand side
All of these result for me in a "Invalid File" or a "Error uploading image" error message.