WP showing a link rather than an image

Hello my WPMU buddies....

I am creating a post with an image, but the image shows a s link rather than an image, would anyone be able to point me in the right direction as to why?

The issue can be found here (1st post, early dalek prototype should be an image): http://gcduino.com/blog-cr/

or the same place is here: http://gcduino.com/dalek-sensor-system/

Tried a new page to make sure there was no code interfering here: http://gcduino.com/1/

Any help or pointers is GREATLY appreciated

Craig R.
Brisbane, Australia