hm, hard to say what went wrong, but its not an issue with the theme, because the theme has nothing to do with the upload function, it’s a WordPress core function. What happend after uploading a image? Can you upload and save images as featured image?
If it’s only in the theme options, please make sure that the “URL File” button is clicked in the upload popup window, this screenshot in this post here:
Normally the button is always selected, but some plugins change the WordPress setting for this button, in this case you have to click the button “URL File” and it will work without any problem.