Images from url not displaying properly in Mimbo 3 theme

I’ve just discovered the Mimbo theme and I like it a lot and have started to tinker with it a little, with a view to customising it to use for my website.

The way I currently post images to my WP installation is to use a url from my web gallery and put a bit of html code around them so that if someone clicks on an image they are taken to the web gallery – I tried to post the html code here but it didn’t display the whole code properly.

In my tinkering with Mimbo and I put that into a post the image does not show up in the featured post or as a thumbnail in the recent posts but the image shows up when you click on a normal post. Does anyone know how to use images from urls so they display in the feature post and thumbnails for recent posts with this theme?

I have set up a test site that shows the problem at http://www.wptest.blackshadow.com.au

What I would like is what happens at this post – http://www.blackshadow.com.au/2009/06/tommy-emmanuel-at-hamer-hall/

Any help would be appreciated.