Problem: Users getting an “Access Denied” error message while inserting a picture via SharePoint 2010 Rich text editor. Verified that the user has “Full Access” permissions on the specific list, Still gets access denied on accessing layout pages such as: /_layouts/RteUploadDialog.aspx, /_layouts/RteDialog.aspx.
Found it happens to other ribbon actions as well: Insert Link or Upload File.
Found that the particular list is with broken permissions! Although not a perfect solution, granting “Read” access at the site level fixed this problem!