I made a test, but unfortunately I was not able to reproduce the issue.
Could you please, open a support ticker and provide us with more information about the editor's set up along with the exact IMG file?
RadEditor uses the framework engine to create thumbnails and by default
the new image file extension is the same as the original one. I
suggest you to try to open for editing the image with some software and
save it as the same type. I think that this might solve your problem.
the Telerik team