Hello Mike,
I am facing the same issue as mentioned in the above StackExchange 
questione but in different development environment. I am trying to upload 
the image with metadata and unable to figure out how I am suppose to append 
the raw binary image data to the xml entry? Again without metadata upload 
is working for me too.
In my case I have converted the image data to ASCII value before appending 
to the xml entry, it leads to 'Bad Request' error. Here is link to my forum 
post mentioning the same issue 
https://groups.google.com/forum/?hl=en#!topic/google-picasa-data-api/FoD4WSoxjM0
Any help or pointers will be highly appreciated! I am totally stuck, at my 
wits end and have got customers waiting for the update :(
I will be highly obliged if you look into this. Thanks a ton in advance!

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