Any host really works (I'm partial on imgur or imgbox but that's just me), but I know lemm.ee has major restrictions on image uploading. Direct images are allowed on this instance as well but they are converted into webp so there is some compression but not a lot. I have some pretty generous upload restrictions as well on this instance since it's art focused. I'll add a link to some image hosts and a heads up to let people know in the sidebar though.
Ah. I take it that my image uploads are first hosted on lemm.ee, regardless of where I am posting. Is that correct? I had assumed that file upload restrictions would be based on the instance where the community is hosted, not based on which instance my account is on.