To fix this, right click the broken image link from the Visual studio work item description pane, then copy the link from the properties dialog (it looks like a label, but you can select all on it by right mouse clicking).
Then simply copy and paste that into Internet Explorer bar, and when prompted enter your credentials.
Next, back in Visual Studio, just click the refresh work item button on the header of the work item window, and do this once for each in line image in the description.
