Image Within Post Title– Better Way???

I’ve managed to make this kinda sorta work, but there’s gotta be a better way. I can use an image within the post title on this photoblog, but there are some limitations:

http://kickasswebdesign.com/wp2test/

The problem with the way I did it is that no other option other than the default for permalinks will work. I also had to strip out titles (and never did find that one in the commenting section . . . ) in the links in certain places to get this to work.

Now, I’m great at skinning, but I’m less good at figuring out stuff like this that might require a special php touch with conditionals or somesuch. Is there a way to do this? Or is there a plugin that would work? I poked around and couldn’t find anything.

This is, as I mentioned, a photoblog, and most, if not all, posts will have a title photo.

I also did something different with the archives, that also looks great but is not optimal when photos are used in the title area, and for the same reasons.