In the earlier version of Confluence was possible to display images in the blog posts macro.

Steps to reproduce:

In a Confluence 3.5

1. Create a blogpost, type something and insert a picture and save it.
2. Now create another blogpost, and insert the BlogPost Macro.
3. Choose the "excerpts" in the Content Type to Display field.

You'll see that will show up the image there.

Now try to do the same steps in a Confluence 4.2.8. You'll see different results, in Confluence 4.2.8 will not show a image like the earlier version.

Workaround:

There's no workaround at the moment.