This might work. All the advice to update my htaccess was not helping. I run my blog on a windows server. This is how I fixed this HTTP error problem.
With in your Dashboard go to Settings and then Miscellaneous Setting.
For some reason my hosting site automatically added this to the Store upload files path.
I deleted it all and replaced it with
wp-content/uploads (just as recommend.) (Also make sure you have a uploads file in your wp-content folder)
Now IT WORKS!
This only took me 8 hours of tweaking to get it to work. Hope this works for you.