Regression: Flash upload is broken (images and assets)

Prerequisite - Enable flash upload as described @ http://www.onehippo.org/library/concepts/editor-interface/enable-flash-for-uploading-image-versions.html

1 - Log-in to CMS
2 - Navigate to Images folder and try to upload image files

Expected - It should be possible to upload images
Actual - The upload dialog disappears few seconds after clicking OK, no image is uploaded, no exceptions or errors thrown in terminal