Shawn,
try to validate https://pwradio.net/fm/?feed=podcast with https://validator.w3.org/feed and you will see that the <image>
(RSS image) is the following:
<image> <url>https://pwradio.net/wp-content/uploads/2011/02/white_backgrnd_-e1296586478840.png</url><title>Paddy-Whacked Radio FM Broadcast! » Paddy-Whacked Radio FM Broadcast!</title><link>https://pwradio.net</link> <width>144</width> <height>144</height> </image>
As you can see the RSS image is https://pwradio.net/wp-content/uploads/2011/02/white_backgrnd_-e1296586478840.png and if you open this image in your browser you will see that its size is 300×300 pixels.
But I have also tried this https://pwradio.net/category/fm/feed/ URL which is the URL of the feed of the category “fm” in the current permalink scheme and the RSS image is different there: <image> <url>https://pwradio.net/wp-content/uploads/2011/03/white_backgrnd_300-e1294810162229.jpg</url><title>Paddy-Whacked Radio FM Broadcast! » Paddy-Whacked Radio FM Broadcast!</title><link>https://pwradio.net</link> <width>144</width> <height>144</height> </image>
The iTunes:image in this feed is https://cdn.pwradio.net/wp-content/uploads/2011/01/white_backgrnd_3001.png and this is an image with 300×300 pixels which is okay. But the iTunes:image in the https://pwradio.net/fm/?feed=podcast feed is the default image.
So your settings are probably right but the question is whether or not https://pwradio.net/fm/?feed=podcast is your current feed of the category “fm”.
This is the image I have entered under “Blog/RSS Image (144 x 144 pixels)”, so shouldn’t it be the RSS image of this feed?
Yes.
Also, I just this morning changed “…white_backgrnd_300-e1294810162229.jpg” from a .png to a .jpg file just to test.
jpg, png or gif are allowed image types.