After looking into it, it seems that some of you with Tapatalk 4 for some reason are being forced to upload images to Tapatalk's image servers instead of the servers I control.
Tapatalk 4 is still in the "beta" or testing phase so this is probably the reason.
If you're using Tapatalk 4 I'd suggest removing then re-installing the app to make sure you get the latest version. I just did a test and I was able to upload a picture and use the WFF server for hosting.
I would also steer clear of that "Tapatalk I.D" feature.
Just a heads up. I know I like to keep control of my files or at least trust the website that I upload files to.