You can manually go in to the HTML in Windows Live Writer and find out what's going on...
Windows Live Writer » Bottom-left » SOURCE.
Images in Windows Live Writer can be dragged around the article as long as there is/are text points in the article. You can't just drag-and-drop anywhere, but it works fine on my machine.
If possible try taking a screenshot and see if we can get a better picture of what's going on...
I hope this helps...
Thanks,
L. Henry Jr.
http://www.lehsys.com
If you this answers your question, please 'propose as answer' for other users.