not an expert on flickr (I use photobucket myself) but the link you pasted in doesn't have a file name at all. Usually the link from flickr will, at the end, have the file name with a JPG extension or a PNG extension (or something like that).
In photobucket each picture has 4 links/url's associated with it to make it easy to paste in an email, forums, etc. Like you I choose the IMG link and post that into my DIS postings.
So try to find a link with the full filename and extension to paste in an IMG link.
Bama ED
PS - okay in between the time I hit reply and pasted my response, you got it working. Looks cool!