Do you have it running under HTTPS? Since all of the API calls are HTTPS, you'll need to run it either under localhost or through a reverse proxy with SSL enabled.
Also, did you set PUBLIC_INSTANCE_URL environment variable to the domain of your home instance?
e.g. PUBLIC_INSTANCE_URL=discuss.tchncs.de
If you open your browser console, it should show some errors to indicate the problem.
This is for other frontends, but I remember reading something about image uploads not working when you're self-hosting due an issue with CORS. I don't know what CORS is, really, so can't expand on it. It may be that you need to upload the image to a filehost like postimages.org and link to the inline version of that instead.