Index: src/wp-admin/includes/schema.php
===================================================================
--- src/wp-admin/includes/schema.php	(revision 33714)
+++ src/wp-admin/includes/schema.php	(working copy)
@@ -467,7 +467,7 @@
 	// 2.7
 	'large_size_w' => 1024,
 	'large_size_h' => 1024,
-	'image_default_link_type' => 'file',
+	'image_default_link_type' => 'none',
 	'image_default_size' => '',
 	'image_default_align' => '',
 	'close_comments_for_old_posts' => 0,
Index: src/wp-includes/js/media/controllers/library.js
===================================================================
--- src/wp-includes/js/media/controllers/library.js	(revision 33714)
+++ src/wp-includes/js/media/controllers/library.js	(working copy)
@@ -139,9 +139,9 @@
 		var defaultProps = wp.media.view.settings.defaultProps;
 		this._displays = [];
 		this._defaultDisplaySettings = {
-			align: defaultProps.align || getUserSetting( 'align', 'none' ),
-			size:  defaultProps.size  || getUserSetting( 'imgsize', 'medium' ),
-			link:  defaultProps.link  || getUserSetting( 'urlbutton', 'file' )
+			align: getUserSetting( 'align', 'none' ) || defaultProps.align,
+			size:  getUserSetting( 'imgsize', 'medium' ) || defaultProps.size,
+			link:  getUserSetting( 'urlbutton', 'none' ) || defaultProps.link
 		};
 	},
 
Index: src/wp-includes/js/media-views.js
===================================================================
--- src/wp-includes/js/media-views.js	(revision 33714)
+++ src/wp-includes/js/media-views.js	(working copy)
@@ -1182,9 +1182,9 @@
 		var defaultProps = wp.media.view.settings.defaultProps;
 		this._displays = [];
 		this._defaultDisplaySettings = {
-			align: defaultProps.align || getUserSetting( 'align', 'none' ),
-			size:  defaultProps.size  || getUserSetting( 'imgsize', 'medium' ),
-			link:  defaultProps.link  || getUserSetting( 'urlbutton', 'file' )
+			align: getUserSetting( 'align', 'none' ) || defaultProps.align,
+			size:  getUserSetting( 'imgsize', 'medium' ) || defaultProps.size,
+			link:  getUserSetting( 'urlbutton', 'none' ) || defaultProps.link
 		};
 	},
 
Index: src/wp-includes/media-template.php
===================================================================
--- src/wp-includes/media-template.php	(revision 33714)
+++ src/wp-includes/media-template.php	(working copy)
@@ -652,7 +652,10 @@
 					</option>
 					<option value="file">
 				<# } else { #>
-					<option value="file" selected>
+					<option value="none" selected>
+						<?php esc_attr_e('None'); ?>
+					</option>
+					<option value="file">
 				<# } #>
 					<# if ( data.model.canEmbed ) { #>
 						<?php esc_attr_e('Link to Media File'); ?>
@@ -671,9 +674,6 @@
 					<option value="custom">
 						<?php esc_attr_e('Custom URL'); ?>
 					</option>
-					<option value="none">
-						<?php esc_attr_e('None'); ?>
-					</option>
 				<# } #>
 				</select>
 			</label>