"After sleeping on it and sitting at my computer with a clear mind... I figured something out ... I went into G+ Photos ... my photos there ... I uploaded my photo for today's blog to Google+ photo album and then went into my blog and downloaded photo for today from that G+ album. CRAZY!"
Kim has explained (via Facebook group) that Google now requires photos to be uploaded to Picasa first and from there they can be inserted into Blogger posts. It sounds very long-way-around and for now the computer is heating up too much to take the time to do it. Looking forward to cooler weather and the opportunity to work it out.