What version of the control do you use? Since you say that there is a loading image I take it for granted that you use our previous version from Q2 Service Pack 1. We plan to change the current implementation of the control and introduce a new CoverFlow control built from scratch. The control is specifically built for Silverlight 3, so you will have a lot of features introduced. The loading image is changed to a loading animation. Unfortunately, there is no current support of changing the loading animation without changing the control template. To learn more about our new CoverFlow control which currently has a beta version click here
If you have any other questions please get back to us.
the Telerik team