In a nutshell, in MT3.16 when you upload a file and select the file to be displayed as a "popup", the resulting link to that popup returns an error. (the slash before the filename is parsed as its html hex entity %2f rather than / ). This is a known issue in 3.16 and there are a couple temporary fixes floating around. I employed the hack described at danandsherree.com. An alternative (unofficial) fix can be found on the MT Support Forum. The latter changes subroutines other than upload_file, thus I prefer the one from danandsherree since it addresses only the upload subroutine -- it's working fine for me.
