Hi,
Yes images may be hosted on a CDN which uses a different domain than the original site. See https://support.google.com/webmasters/answer/178636?hl=en where after <image:loc> it says:
In some cases, the image URL may not be on the same domain as your main site. This is fine, as long as both domains are verified in Webmaster Tools…
But it does not clarify if that verification needs to be by the same owner.
In any case, your solution might not work because now the urls in the sitemap and the urls on the actual pages do not match. This causes Google to simply ignore the ones in the sitemap.
Do you have a Google Webmaster Tools account? Do you get any errors/messages there?
There are some related discussions on Jetpack Photon having a negative impact on SEO like https://www.ads-software.com/support/topic/does-jetpacks-photon-damage-image-seo and https://www.ads-software.com/support/topic/images-not-indexing-with-photon but there is no definite answer.
On my own site where I use both Photon and have the wp.com urls in the image sitemap locations, I know for a fact that images hosted on the Photon CDN are indexed (go to Google > Images, search for “site:status301.net coolclock”) and even though I’m not sure (did some more queries like that) it looks like most all the images on my site are indexed. But even so my Webmaster Tools account informs me that only 7 of the 55 images in the sitemap are indexed.
I think this is because of the variations in the CDN subdomain. Like one of the coolclock images that is presented in the sitemap as coming from i0.wp.com appears to be coming from i2.wp.com when that image is opened from the search results page. This different subdomains (i0 – i4) might well explain the difference in reported indexed images and the actual number.
