I’ve created a new Blot.im site for my photos: photos.joshsullivan.io. I’ve decided it would be better to separate them out to a separate blog than try to maintain them in a single blog.
@Gabz The image does have to be hosted somewhere, in Blot you can add images within your sync client. I have my images in my Blot folder in /_assets/images/. In my posts the markdown link in Ulysses would be  Does that make sense?
Out of curiosity with M.b can you add an image to Ulysses and it will be uploaded automatically when you add the post to M.b?