Where is the error, is it PodPress or could it be 1and1 servers not updating correctly?
Your RSS feed (http://www.wdwhappyplace.com/feed/) does contain
http://www.wdwhappyplace.com/wp-content/uploads/2012/08/WDWHappyPlaceConcept144.jpg as RSS image and
Are these the new images?
If these are the new images then podPress works as expected. The server works of your hosting provider works in this case too. (The server of the blog is usually not the problem.) But the other part which is important here is the iTunes Store (iTS) server. Is http://www.wdwhappyplace.com/feed/ the feed which is registered at the iTS server?
podPress offers RSS (or ATOM) which are additional to the default feeds of a WP blog. Also it offers the possibility to customize category feeds. Which is the feed you have registered at the iTunes Store? Did you adjust the image settings for this feed? (or maybe for a different one?)
p.s.: it is no good practice to open a new thread to same issue while the other one is still open (and not older than 2 days).