Thx for the information.
What is the software / webmail you read the email with ?
I don't have any trouble with thunderbird and hotmail.
Your analysis seems right to me. What you see is the image encoded to be displayed (because it's a HTML mail), in case the mail is cut / previewed and the amount of characters cut are in middle of the image datas. You can also switch to full text, to get an simple message that may be better readable.
I suppose the email is nicely displayed in "full window" mode ?
I just checked and there seems to be an issue with Microsoft Outlook (heavy client - web client is ok), images are not displayed, even after you clicked "download images" in top of message.
The "open in browser" option (shown after you chose to download images) is fine.
Sorry for the inconvenience.