First make sure your image is set up for MULTIPLE PARTITIONS aka the WHOLE disk.
Then take a look here: [url]http://fogproject.org/forum/threads/problem-uploading-ext3-ubuntu-image.459/[/url]
I found this from the link above. Others have had success, try this below:
Update: I finally tried manually using PartImage to pull the image with the plan to then copy it manually in to the server. In doing so, I saw that PartImage was erroring out (which FOG was hiding). Googling around found that running an fsck prior to uploading the image fixes the problem. I may dig in to the FOG code to see if I can make it automatically run an fsck prior to pulling any Linux image. For now, though, I just boot my source PC in to a live CD and fsck, then I upload the image. Works a treat.