I updated your jsfiddle: http://jsfiddle.net/9aa5n/53/
Since you didn't provide absolute paths to images, I added some from the net.
I removed your click event, and replaced it with this, I believe your issue was how you were referencing the elements in jQuery.
$(".edit_button").click(function() {
var img = $(this).find("img").first();
console.log(img.attr("src"));
if (img.attr("src") === 'http://iconizer.net/files/Brightmix/orig/monotone_arrow_right.png') {
img.attr("src", 'http://png-3.findicons.com/files/icons/2315/default_icon/256/arrow_down.png');
console.log(img.attr("src"));
} else {
img.attr("src", 'http://iconizer.net/files/Brightmix/orig/monotone_arrow_right.png');
console.log(img.attr("src"));
}
});
This should get you started to finish polishing up the UI,
i.e. closing all .edit_button
and then open only the $(this).find("img").first()
element ...