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This isnt youre fault of course. Its a flaw in Blogger. When you upload the image it automatically puts a line break in after it. In order to fix this all you have to do is delete it. If you write your post in the Edit Html field then after uploading the image delete any spaces between the beginning of your text and the end of the anchor tag. If you use the Compose field then just delete the spaces between the text and image.
Another thing that you might want to do every couple weeks or so is republish your entire blog. This updates all the indexes on old posts. To do this click on the "Posting" tab and click Status then Republish Entire blog.
O ke doke, Ive gotten that off my chest now. Just for good measure... Shedubeard has sex with boys.