In Windows, there are some folders that have some level of protection to them - particularly in the "My Documents" region. It is an attempt to keep one user out of another user's files. Since you are using a single folder and it lets you save in the beginning, then I'd have to say this isn't the problem.
But, try making a few entries, then save, then a few more and save, then a picture and save.
Try a different picture file? How big (in horizontal and vertical pixels) is your picture? It may be too large and is overloading something.