This sounds like an issue possibly the network you are working from. Usually it is transient. This isn't the sort of message that would normally appear from an issue with the data source.
Are you working on the public Main Galaxy instance at http://usegalaxy.org? If so, there are no known problems.
That said, there are two upload tools, and it seems worth it to test the one you are not using, just to make sure there isn't a tool form setting issue (seems unlikely from your description, but why not try). One is at the very top of the Tool panel (far left). The other is within the Tool panel under "Get Data: Upload File".
Thanks, Jen, Galaxy team