I am unable to reproduce your problem. Perhaps my little bug caused more issues than I thought. Could you download the updated code and apply to your system?
Alternatively, you could go to the USD_INIT plugin and find the line with the strncmp statement, which will look like this:
Code:
$bDoReplacement = (strncmp($Temp, '<img src="') == 0);
and replace it with this:
Code:
$bDoReplacement = (strncmp($Temp, '<img src="', 10) == 0);
and then let me know how that affects your issue?