That sounds almost like you're coming across a request size limit somewhere in your server (maybe in news.arc or app.arc or srv.arc, maybe in Apache or nginx or whatever)... but probably not since the upload is less than 4MB. All I know is PHP tends to limit uploads to 4MB unless you reconfigure it. :-p
Maybe you're coming across an issue with the fact that bytes are being treated as characters? Do you have another file you could test? (Maybe one you could share with us?)
I thought there might be a request size limit, since there's an nginx in front of Anarki. But then I tried connecting directly to the Anarki web port and got the same result.
Here's a 822K file which I just confirmed fails to be uploaded:
Sorry for leaving you hanging here.... I'm not really in the practice of running news.arc, and when I asked for a file to use for testing it's because I thought maybe someone else would pick up my slack. XD
