When I try to paste an image that is on my clipboard onto the Live doc, I get a drop down where I have to choose options but none of the options paste the actual image. The three options are Use Rich Text, Use Markdown, or Use Plain Text.
It appears I have to now save the image and browse for it in the image icon. This wasn't my experience previously.
This is in my personal space - I do have the Add and Delete permissions for Attachments