I had a first look last night and my preliminary findings are that the DB is actually fine, but the frontend (server.js from Lemmy-ui) and the Pict-rs service are the culprits.
Pictrs doesn't have lots of configuration options and often calls on exiftool to to... whatever. Pictrs also seems to have to deal with a few large pictures, so we reduced the upload size.
Sadly the error users get is some JSON parse error, so this doesn't really tell them the issue and they might try to upload again.
Found a few things which we might want to open a bug report for, but we first have to set up a test server to check my suspicions.