Intriguing that this thread would be re-upped as I return to the Net world from a lengthy absence yet again.

Anyway, from what I have learned over the period of time this restriction has been in place, pictures that are "hotlinked" directly from the internet to posts are automatically reduced to a thumbnail size. You may notice this most glaringly in the images posted on the various model threads by our dearly beloved DJPFC, which are hotlinked from PinupFiles/PinupGlam. Whether he has noticed or whether he cares is an entirely different matter, but what is possible is to select the option to "View Image", which in most cases means the browser will load only that picture into the browser window/tab, and when you do so, the hotlinked image previously crushed to a shadow of its former self will instead gloriously expand to its true proportions,
freed from the damnable tyranny of the forum PHP coding!!!……

…ahem, got a little carried away there.

Almost as an aside, if you attach the picture to your message in order to display it full-size as you were planning to do by hotlinking into your post, you can do this:
(1) Post it initially as an attachment.
(2) Click the image to view it through the pop-up window viewer of the forum.
(3) Copy the HTML code that the forum generates to display the image in the pop-up viewer (either by copying the URL bar or by selecting the "copy image location" function in your browser).
(4) Having done all that, edit your message, placing the code you copied into an [IMG] UBB code tag at the point in your message you desire to have it.
(5) Save your modified message
with the attachment and now also the full-size image you wished to display in the first place.
Frankly, I think it ruins the effect for some posts when you're trying to use an image as the whole message, as g00ber, pedonbio, JJ, and others often do.
Q-"
My two more cents"-BE

Mod edit: re: the thumbnail size issue, there are some trade-offs. We'll be trying a change and we'll see how that works. Making them too small creates problems in some situations and too large creates other problems. NO setting will please all users all the time.