where is images/image.jpg?

The plugin is search for an ‘images’ folder inside the current working directory. For example if you are in /blogs/, a file looking for images/image.jpg is actually looking for /blogs/images/image.jpg. This can obviously get very messy when re-writing URLs with stuff like /2010/03/blog-title so actually put an image in the specific location is impossible, you will need to edit HTML or at least .htaccass to resolve it.

Look up: <base> tag, mod-rewrites, javascript or editing whatever plugin is creating that HTML (str_replace on the output?). Personally I think you need to look into filtering the HTML you’re receiving from the SOAP service to clear that up.