From the Model Mayhem FAQ:

How am I over the photo limit? I thought I could upload more photos!
When you subscribe, upload photos to your new limit, and then downgrade, your photo limits decrease accordingly. If you have a lot of images in your Unassigned folder when you downgrade, you will see this message.

In order to add new photos to your portfolio, you can either upgrade again or delete images from your portfolio until you are under the limit of your new membership level.

Additionally, if you have any hidden images in your portfolio, those hidden images are also counted toward your photo limit. Be sure you delete any photos you no longer want in your portfolio if you want to upload more!