This doesn't sound like an issue with Optimizer, but I'd be happy to take a look. If you want to email me a temporary login (and your url) I'll check it out for you.
Would you know what might have changed since you last tried to upload an image, at all. Did you maybe switch hosts/servers, edit any server files, change file/folder permissions, or install any plugins perhaps?
One thing that comes to mind...at Gallery --> Add Gallery / Images, have you tried uploading without the "Scale images to max width Xpx or max height Xpx" checked? I find that option to be quite buggy.
Hope this helps!