I am running my WordPress on a Tonidoplug2 server. It just has a low power ARM CPU. WordPress works very good on it. A little slow with bring up WordPress web page.
But I think that's what wrong when I instert a image. All sees good but then the Add an Image part after a little bit just truns all wight and all I can do is click the x in the top right. I can then go to "Media Library" and it's there. Can tell it to insert the code then. But I have to edit the code with the small image code like 150x150.jpg put that on the end.
If I log on to the server it puts 3 images there a full size one, a 150x150, and 300x179 one. So that works. It just will not come back to put the link it.
I don't think it's just WordPress is not giving it enugh time to put get done with this image. Can you update it to give it more time on images?