Not sure what's happening under the hood here but I think there is an issue with the AjaxForm function.. I tried to upload a simple image and get this error after the ajax request was attempted/triggered:

Image /​workspace/[​object ​File]​ The file uploaded is no longer available. Please check that it exists, and is readable.

I think this is related to the path change in the upload field again... maybe the data object no longer contains the info we need in the response callback??