After you have cleaned out your storage the normal way, cleaned your cookies and temporary files out, the following may be your problem
If you belong to a group then quit without ever deleting your pictures, it takes up your storage space. I know a few have had a problem before and I just heard this one.
If you can, rejoin the group and delete all your things or ask the Manager to do so. (good luck) some don't want to but MSN says they have to.
You can also write to MSN and tell them the groups URL, your screen name and request they remove it, they will do this.
This should free up space you can't account for.
Then it could just be an MSN glitch and will work in a few days.