Well, you're on the right track setting up a blossom server based on the feedback I received with a similar post about a week ago, but that's all I know. If you figure it out I'd appreciate any info you garner in the process.
Discussion
It doesn't seem like it's a file issue so much as a frontend javascript issue, but I'm not sure. Images work fine. I'm guessing if I use the API to upload a file it'll work, but I haven't tested that yet and it's not really what I want to do. Might have to. For now, just posting youtube links seems like the most usable way.