When tracing your script as it does the upload process, I found this in the steps:
============================================================
[root@gator1595 /home/user/public_html/ponybeats.com]# grep droplet-projects.com strace
19:25:48 send(4, "GET /yourls-api.php?signature=1559ab7e6c&action=shorturl&format=simple&url=http%3A%2F%2Fponybeats.com%2Fimages%2F91utq.jpg HTTP/1.1\r\nHost: droplet-projects.com\r\nAccept: */*\r\n\r\n", 176, MSG_NOSIGNAL) = 176
19:25:48 recv(4, "HTTP/1.1 302 Found\r\nDate: Thu, 18 Aug 2011 00:25:48 GMT\r\nServer: Apache/2.2.19 (Unix) mod_ssl/2.2.19 OpenSSL/0.9.8r DAV/2 mod_fcgid/2.3.6 FrontPage/5.0.2.2635 mod_bwlimited/1.4 mod_auth_passthrough/2.1\r\nLocation:
http://droplet-projects.com\r\nContent-Length"..., 16384, 0) = 288
============================================================
Specifically, look at this part:
4, "HTTP/1.1 302 Found\r\nDate: Thu, 18 Aug 2011 00:25:48 GMT\r\nServer: Apache/2.2.19 (Unix) mod_ssl/2.2.19 OpenSSL/0.9.8r DAV/2 mod_fcgid/2.3.6 FrontPage/5.0.2.2635 mod_bwlimited/1.4 mod_auth_passthrough/2.1\r\nLocation:
http://droplet-projects.com\r\nContent-Length"..., 16384, 0) = 288
Now when I use "GET" to retrieve that URL like your script did. I see this:
====================================================================================
[root@gator1595 /home/user/public_html/ponybeats.com]# GET "
http://droplet-projects.com/yourls-...ple&url=http://ponybeats.com/images/91utq.jpg"
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 3.2 Final//EN">
<html>
<head>
<title>Index of /</title>
</head>
<body>
<h1>Index of /</h1>
<ul><li><a href="admin/"> admin/</a></li>
<li><a href="changelog.txt"> changelog.txt</a></li>
<li><a href="css/"> css/</a></li>
<li><a href="images/"> images/</a></li>
<li><a href="includes/"> includes/</a></li>
<li><a href="js/"> js/</a></li>
<li><a href="pages/"> pages/</a></li>
<li><a href="readme.html"> readme.html</a></li>
<li><a href="robots.txt"> robots.txt</a></li>
<li><a href="sample-public-api.php.txt"> sample-public-api.php.txt</a></li>
<li><a href="sample-public-front-page.php.txt"> sample-public-front-page.php.txt</a></li>
<li><a href="sample-remote-api-call.php.txt"> sample-remote-api-call.php.txt</a></li>
<li><a href="user/"> user/</a></li>
<li><a href="yourls-api.php"> yourls-api.php</a></li>
<li><a href="yourls-go.php"> yourls-go.php</a></li>
<li><a href="yourls-infos.php"> yourls-infos.php</a></li>
<li><a href="yourls-loader.php"> yourls-loader.php</a></li>
</ul>
<address>Apache/2.2.19 (Unix) mod_ssl/2.2.19 OpenSSL/0.9.8r DAV/2 mod_fcgid/2.3.6 FrontPage/5.0.2.2635 mod_bwlimited/1.4 mod_auth_passthrough/2.1 Server at droplet-projects.com Port 80</address>
</body></html>
====================================================================================
The URL it is attempting to load is this one:
http://droplet-projects.com/yourls-...ple&url=http://ponybeats.com/images/91utq.jpg
If you try that page, you will see that it does not work and redirects to the home page where you see this at the bottom:
Apache/2.2.19 (Unix) mod_ssl/2.2.19 OpenSSL/0.9.8r DAV/2 mod_fcgid/2.3.6 FrontPage/5.0.2.2635 mod_bwlimited/1.4 mod_auth_passthrough/2.1 Server at droplet-projects.com Port 80
The above should look very familiar, as it is the same as the trace I ran on your script when it processes the upload.
So, unfortunately what this means is that something wrong is happening with your script when it attempts to pull the URL and is sending it incorrectly unfortunately. I do not know exactly why this would be happening as this would require the support from the developers. But, I have dug into this as much as possible for you to find where it was breaking and from here you would would need to talk to actual developers who can review the code to find out why it is doing this.
Regards,
Linux Systems Administrator
HostGator.com LLC