I have figured it out with the help of a coworker. In my company we all login to the same server and everyone is visible to everyone else. It turns out that the adinline plugin requires the bot to be on your buddy list before images will show.
http://www.adiumxtras.com/index.php?a=xtras&xtra_id=7926
This really comes down to me not reading the instructions :( Anyway the issue is resolved. woot!