After many weeks of searching I found a solution that works for me. I found this plug in that fixes the issue:
http://wordpress.org/extend/plugins/libxml2-fix/
Turns out that WordPress and libxml2 aren’t playing well together: the blame seems to be on libxml2
–http://joncanady.com/2009/01/wordpress-xmlrpc-angle-bracket-fix/
I am have that issue… when I try to post this is what I get:
a href=http://www.flickr.com/photos/abinadius/3485859403/ title=photo sharingimg src=http://farm4.static.flickr.com/3614/3485859403_2217b733ae_m.jpg alt= style=border: solid 2px #000000; //a
br /
span style=font-size: 0.9em; margin-top: 0px;a href=http://www.flickr.com/photos/abinadius/3485859403/PictureMail/a
br /
Originally uploaded by a href=http://www.flickr.com/people/abinadius/abinadius/a
/span
br clear=all /
p/p