Thanks niv,
I followed that process, but it only posts a link to the image, not the image itself. Should this work through any image hosting site or does WGT have it limited to tinypic only? The particular screenshot was uploaded to picasa web image hosting, and was placed in a public folder with no security or access restrictions.
I also noticed the 'insert media' option also loaded the default location/URL with a leading
http://
meaning that when you post the link properly, it duplicates that. I did delete the duplicate data, but still got only a link - no photo. I'll give tinypic a try as well, but I'm guessing this should work regardless of the image URL.