Actually the preview is not the same thing as the Image you see in the HTML Editor at designtime. The designtime image is the original image, while what you see in the preview is a realtime preview of the image (resized to proportion). This is done by a custom thumbnail generator handler and I utilize the Bitmap graphics object to do this. It's possible that the code fails on your environment or setup somehow.
I'll look into alternate routes to make that bit of the code even more robust. It is likely the code is failing and your not seeing the original error because I have instructed the editor to display a generic thumbnail in case there is an error 
Try clicking on one of the links in the treeview (Image browser) and use firebug ( a firefox addin) to see what the original request url is. Something like the following :
http://www.jiffycms.net/demo/jiffycms.axd?d=thumbnailgenerator&t=633993998500012917&width=100&height=100&imgurl=/demo/Gallery/Greece/P1030281.jpg
The above url is request to one of the thumbnails in the online demo section on this site. You should get a similar url. Request it in your browser directly by placing it in the browser address bar. If everything works, you will see the requested stream (raw data) output, otherwise you will see the original error message. Paste this error message here in full.
This will help me greatly in getting to the source of the problem. Or if it's a problem in your setup, this should help you diagnose.
Have a good weekend,