I've duplicated this in production and on a local clean install.  We've received some reports from a  user that images they have saved using the core editor (telerik in this case) when writing a PM are not showing up in the notification email or on the recipient's view of the PM.  (we have rich text enabled for PMs)

In looking further at the issue it appears that AS is changing the Body of the message somehow.  It appears that AS is encoding the body, but things are getting mixed up in the save process.  A SQL trace confirmed that the garbled encode is what is being passed into the stored procedure.

Breaking down what I've found:
<!--[if gte mso 9]> Normal 0 false false false EN-US X-NONE X-NONE verrideTableStyleHps/> MicrosoftInternetExplorer4 <style> /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman","serif";} </style> It seems to taking a simple image tag like this:

 

Saves in DB as this:

 

Which renders on the recipient’s Private Message (and email notification) like this:

Obviously, not good.  AFAIR These worked prior to 1.9.3. 

Can't see your examples. Make sure you use the code blocks.