Hi Support Staff, I too am having this issue, I have the latest wordpress version, I’m using hostgator cloud hosting (limited php control)
PHP Version 5.5.37
max_execution_time 30
max_input_vars 1000
after many hours of thorough testing I’ve concluded a few things:

-this issue DOES NOT happen when I switch themes, to, for example, twenty seventeen (so when I switch themes I am then able to upload all images without any issues
-this issue happens with or without demo installed
-images less than 300kb will generally upload, but it takes a while to ‘process’
-this issue happens even with all plugins disabled
-this issue happens even with newspaper 8.7.2 (my previous version)
-I’ve tried it on a brand new wordpress install as well and this issue still happens

My support ends in 25 days (I haven’t had a chance to set up the theme until now) and this is the only issue I’m having. It’s a big deal as it’s holding back finishing my website until it’s resolved. Need this issue fixed asap! lots of people seem to be experiencing this, and like I said it’s NOT happening with other themes, so the issue seems to be with the newspaper theme itself.