Oops! You're right. I DIDN'T understand at all!
I now see where I have been doing this incorrectly. I have been using the "Insert/Edit Image" from the editor to include images. The example you show me is done via "Insert Media".
I have never used "Insert Media" and need to start using this from now on. However, my images are stored via the Joomla Media Manager. I assume that the EasyBlog Media Manager must store images in a different location.
Thanks for your help!
David