Okay, more fun. On the same page that displays the image as a link:
So, using the [ img ] tag, it displays the image as a link under "Recently Added Quizzes" and just displays the code under "Easiest/Hardest Quiz". But it does display the image when you go to take the quiz.
Using html, it just displays the code even with Chris's fix. Is it time to dump the idea of using images or is there a light somewhere down there at the end of this tunnnel?