I don’t understand why they won’t add the old insert image button back in. Just disable it by default or something and give us an option on the settings to add it back… How difficult is that. And I agree, I write tutorials that include a lot of screenshots and ever since 2.5+, doing images has been a nightmare for me. Almost makes me want to migrate to a new blogging system just because of this 1 thing.
Also happening to me:
Apparently there’s another post on this as well but it also has no solution unfortunately:
http://wordpress.org/support/topic/178393?replies=8#post-818509
This is also happening to me. Getting quite confusing. Is there any way to fix this?