1) Go to Settings, Basic, scroll down and select the Old Editor and save your settings.
2) Then create a new post and upload a photo. You can save this test/new post as a draft, no need to publish it.
3) Then go back to Settings, Basic, scroll down and select the New Editor and Save your Settings.
4) This should hopefully now enable you to post/upload photos again with the New Editor.
I have no idea why this works, but it worked for me.