I had my WP site quota set to 20MB and everything worked.
I just installed Pro Sites, and set the "Free Quota to 20MB" and now it tells me that my main site has filled its quota, when I try to upload Media.
Ok So I up the free site Quota to 50MB....Same Result.
So I change the WP built-in Quota to 50MB....Same Result.
I find it hard to believe I'm filling a 50MB quota with 1 pic.