I created a 1200 x 600 pixel image in Photoshop as a test, uploaded it, and it seemed to work fine. Then I went back to the image, deleted the test layers and created the final version of the image. It's still 1200x600, and it's 1.3M, but every time I try to upload it I get the error.
I deleted the previous test image, so I'm just uploading a new image.
Also, I noticed that in this account I see: "Recommended dimensions of 1252×626
Maximum file size of 5MB" instead of the 1200x600 that everyone else remarks on. Not sure what the discrepancy is, but the 1200x600 did work earlier today.