I recently lost all of my blogs (no backups) and am painstakingly rebuilding everything from scratch. I am having a hard time remembering all of my setting and plugins. I used to be able to attach an image from a url and choose large, medium and small and resize it the same as I would with an uploaded image. Now I can just drag the corner and resize it which is hard to do on some large images. Is there a setting or plugin I am missing?
No, they changed the default functionality to be "better". The functionality is still there: edit the post, click the image once. You'll see the draggables and two buttons will appear on the image itself. Click the pencil (edit). The size settings are in the middle on the left of the popup.
Sorry, missed that bit about the external image (it was early in the day!). The best way to do it is with a CSS class or a plugin. WP is notoriously bad for using external images because they're on their high horse about copyright. There's a CSS example here: http://www.wjunction.com/13-tutorials-guides/84086-simple-images-resize-wordpress.html