What steps will reproduce the problem?

1. Create a new document
2. From the Common shapes palette, drag & drop the "Bitmap image" item
3. Right click and choose "Action> Load Embedded Image
4. Select the attached "test_700_quality_37_Fails.jpg" file

What is the expected output? What do you see instead? The image is not loaded

What version of the product are you using? On what operating system? Pencil 1.1 Rc2 (Build 1) on GNU/Linux (ubuntu 9.10)

Please provide any additional information below. The image test_700_quality_36_Works.jpg works fine. The only difference is the quality rate used to save them. There is no problem with png images or with linked images.

It looks like the problem comes from the fact that jpeg images are internally converted to png (via canvas), hence get a huge size compared to the original size.