Ok , I followed everything you said , pressed publish and nothing happened ! Before I pressed publish I pressed insert and a small empty square box came into the blog, but when I pressed publish ... nothing .
I guess it must be me !
Two things to check:
1. In the Insert Media dialog box, when you paste the URL, make sure it is the complete URL (it should end in .png).
2. The "Insert" you push is the Insert button in the Insert Media dialog box.
If this is exactly what you did, then I think maybe it only works if you do it on a PC browser and not a mobile browser. I don't have an iPad so I can't test doing it that way. But I did try doing it here on my Windows PC and it worked fine.