Hmm I've got iPhone4 also. When I upload to an album there the "choose file" button, then the option to take a photo or choose existing. Same goes for attachments on posts, but I can only attach one photo per post.
Hmm not too sure how to help then. Have you done your software updates/patches? Just edit the photo from your photo album. Rotate it one way, save. Then go back and rotate it right side up, save. I had that issue, and this worked for me.