This this is strange, this explains why imgur did not work. It seems that steemit.com fetches the images from the link location, reduces its size store it at steemitimage.com and displays only the reduced image. Seems to me like a bug.
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Yeah I've tried a few different image hosting services, different file formats, almost everything I can think of to get around displaying messy stuff; nothing. I did say on my previous post when I first noticed how I hope this is a bug, because I've seen it happen before, but it didn't stick around long enough for it to be brought to anyone's attention.