I have encountered this problem in the past. At least for me, it seems to occur more when the source file is too big. ImageShack might be "timing out" during the upload, telling you it's done when it is not and thus failing to complete the task of generating an address for the image and the compressed thumbnail. Maybe you need to reformat the images you're trying to upload to make them smaller. I can't see why images need to be larger than 1600 pixels wide, but many people generate high-res images well over 2000 when this is highly impractical since most people don't have displays to accommodate these sizes.
Resizing is easy if you have simple software like MS Paint.