Which version of PHP do you use? Which version of the MarkupHack did you upgrade from?
The hack works for me with 6.0.3, so I'm not quite sure what the problem can be.
If you could try changing this line in admin/doaddgraemlin.php I might get some insight into this problem:
$html -> not_right("All required fields weren't filled.",$Cat);
Into this:
code:
$html -> not_right("All required fields weren't filled. Graemlin: $Graemlin Imagesize: {$HTTP_POST_FILES['Image']['size']}",$Cat);
