Same issue, it won’t create the folders so nothing happens when the image upload reaches 100%. This is a brand new install of the latest wordpress and latest Image Store. It isn’t a permissions issue as the _imsgallery folder is 755 and the server runs SuPHP.
Hah. I thought I’d already disabled it – it’s W3 Total Cache causing it!
There’s obviously some sort of incompatibility between it and Events Manager. If I flush the caches it makes no difference, I have to completely disable it and the problem goes away.