Depending on the constraints on the Image field of the Product document type, is it possible the column contains blank values rather than null's? Try adding an additional where condition checking if the field is null or empty.
<cms:CMSRepeater ID="rptProducts" runat="server"
Path="/Products/%"
ClassNames="Products.Item"
TransformationName="Product.ProductList"
SelectOnlyPublished="true"
StopProcessing="true"
PagerControl-PageSize ="4"
PagerControl-PageNumbersSeparator=""
PagerControl-BackNextStyle="display:none;"
EnablePaging="true"
ZeroRowsText='<%# CMS.GlobalHelper.ResHelper.GetString("ZeroRowsText") %>'
WhereCondition="Image IS NOT NULL AND Image <> ''"
/>