You must have chosen the wrong link because your link isn't even wrapped in image tags. You probably chose the "link" option and not forum code. I copy and pasted your photo to my pc, uploaded it into imageshack and highlighted the "forum code" link and pasted it here.
Hmm...Not sure if I quite understand your question so you'll have to excuse me , but in a nut shell, when the photo is uploaded in imageshack and it takes you to the second screen with all the options to choose from, all I do is highlight the "forum code" link, click copy and then come here to my reply box and paste the link here. You want the link that has the image tags in it which is the forum code one. I don't add the image tags here, but rather it is already in the link. Not sure why it isn't working on your end.
If that doesn't work for you try this one. Go to TinyPic - Free Image Hosting, Photo Sharing & Video Hosting and go through the same process of uploading your picture and when the links/options come up, highlight and copy the link that says "IMG code for forums and message boards" and paste that link here and see if it works.
OK I did that but when I did a preview post all I saw was the link. I guess you have to actually post it befor it works. Thanks Krish I will try and post another.
Yea, you have to actually make the post for it to show up. When you paste the link, it will show up as just text till you hit reply. If you were able to hit the edit button on my post with your picture, it will show up as just text.