Thank you for contacting Telerik support.
This is a known issue and it is logged in our Public Issue Tracking System
. It is already resolved in our latest version as you can see from the following link: http://www.telerik.com/support/pits.aspx#/details/Issue=14378
To workaround this with the version that you are using you can set the ShowImageInEditorArea in code like this:
I hope this helps. Should you have any other questions do not hesitate to ask.
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