A new verison of Scratch will be released very soon that won't time out so fast!
In the meantime, you can try reducing the size of your project by going to the EXTRAS menu and compressing sounds and compressing images.
Or you can wait for the new version. Sorry for the timeout issue!
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To add to what Natalie wrote: We hope to get a new version of Scratch out next week that fixes this problem. We will post an annoucement when it is available. (Smaller projects and faster internet connections seem to help with the current version, but the new version of Scratch should work even with large projects over a slow connection.)
Apologies to those having upload problems!
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