I just found the problem with uploading images. In the file /administrator/components/com_lightgallery/controllers/images.php

you will find 2 lines at line 403 that look like this:

$this->imageCompression($source,150,$dest);
$this->imageCompression($source,500,$source);

Remove the 2nd line which is line number 404. You can also change the number 150 to whatever thumbnail width size you prefer. That fixes the upload error.