local Image file insert not working, but drag and drop works

[cems2]

platform: this fails on both

1. Strut.io webpage and firefox
2. strut grunt server on localhost:9000

Problem:
I have tried insert images stored locally on my computer using the "image" button which lets you browse. I get an error that says the URL is wrong and the text field says "unable to upload image to imgur".

steps to reproduce:

1. press the image button in strut.io
2. browse your local file system and select a .png or .jpg file
3. the "preview" progress bar will run, but then report an error.

alternatively one can enter a file:///path/to/file.jpg in the form. but this seems to do nothing at all as the insert button does not respond to this. Browsing is required to select the image.

regression:
dragging and dropping the file from the filesystem (linux) onto the strut.io slide does correctly insert the image.

entering a web URL including an URL from imgur or other website works.

I have verified I am correctly entering a local file URL path and the that the path doesn't have any illegal characters in it by first opening the image in firefox then copying the file:///URL from the firefox URL bar and pasting this into the Image browser test field.

I have tried doing this while firefox also is logged into IMGUR but this doens't seem to matter.