I had this same Issue and under VAR/WWW/FOG/LIB/FOG/FOGFTP.CLASS.PHP
public function login
$username = null
$password =null
I changed this to my ftp user name and password and it solved the issue .

@Sebastian-Roth thanks I figured it out .

I am having these same issues with 1.2.0 on ubuntu 12.4 lts . I followed the instructions for the ftp images stuck, added the passwords now it fails at tftp. I could get past this before adding the passwords ,but would have to move the image manually to the folder .