I have looked up the question and have seen several solutions addressing things like Select or having protected worksheets, none of which apply to me here.
For various
On moving to Office 365 and Win10 (can't say which of those was the culprit) I found a bunch of existing macros which would give that same error when trying to paste a copied image onto a worksheet.
When entering debug, the "paste" line would be highlighted, but if I hit "Continue" it would (after one or two attempts) run with no errors.
I ended up doing this:
'paste problem fix
Sub PastePicRetry(rng As Range)
Dim i As Long
Do While i < 20
On Error Resume Next
rng.PasteSpecial
If Err.Number <> 0 Then
Debug.Print "Paste failed", i
DoEvents
i = i + 1
Else
Exit Do
End If
On Error GoTo 0
i = i + 1
Loop
End Sub
...which looks like overkill but was the only reliable fix for the problem.
EDIT: cleaned up and refactored into a standalone sub.