The new-style short URLs feature has a compatibility issue with the picup feature in the plupload addon.
I don't seem to be able to login to your server now, so I'll write down the fix here...
Rename data_custom/picup.htm to data_custom/picup.html (i.e. add an "l" on the end)
Edit the themes/default/templates_custom/JAVASCRIPT_PLUPLOAD.tpl file and change "picup.htm" to "picup.html".
I don't have the facility to test this anymore unfortunately, so I can't do an end-to-end retest of the functionality. But I know this specific fix addresses the issue here.
I don't seem to be able to login to your server now, so I'll write down the fix here...
Rename data_custom/picup.htm to data_custom/picup.html (i.e. add an "l" on the end)
Edit the themes/default/templates_custom/JAVASCRIPT_PLUPLOAD.tpl file and change "picup.htm" to "picup.html".
I don't have the facility to test this anymore unfortunately, so I can't do an end-to-end retest of the functionality. But I know this specific fix addresses the issue here.