Hi KristyS,
Last time I checked with Firefox (in Linux) that didn't show any images for any feeds.
But in Chrome browser, it works fine, including the images.
Also, I came across the same issue again in my client's site. Updating the settings didn't solve this time. However, the issue seems to be in the caching plugin we use (W3 Total Cache). I disabled the caching of feeds now (that was enabled either by default or by my client at some point in the past). The latest posts are showing up again in the feed. Need to wait for another day to check, if everything is working in my client's site feed via Feedburner.
If you are using any kind of caching plugin (especially W3 Total Cache), try disabling the feed cache.