This problem developed earlier today for me. I was running 3.6.1 at the time. One of the forms suggested that the problem was an incompatibility between WP 3.6.1 and the flash uploader and that I should update to 3.7.
I updated and the problem still exists. It seems to take a little longer to time out or error out than it did on 3.6.1. But the end result is the same. I deactivated ALL plugins and the error still exists. I tried a no flash uploader plugin that was suggested in one of the forum threads and that did not work.
I am up against a deadline for an article to post tomorrow. Does anyone have any ideas?