Could it be that the image which you are uploading contains more data then the image alone? Some images contain for example color information which is used by for example photoshop. Try opening the image in an image editor and save as png
There is some form of folder access rights issue here. It basically says it can't create a temporary cache file for the original image while trying to create a thumbnail. This is in your stacktrace:
Caused by: java.io.IOException: Access is denied
at java.io.WinNTFileSystem.createFileExclusively(Native Method)
at java.io.File.checkAndCreate(Unknown Source)
at java.io.File.createTempFile(Unknown Source)
at javax.imageio.stream.FileCacheImageInputStream.<init>(Unknown Source)
You can fix this by configuring folder access so that the application can create temporary files (probably in the tmp folder I'd say)