Solved the problem by taking the attached properties approach.
To set the Source property on an Image using my custom logic, I do the following:
<Image Width="75" Height="75" my-namespace:PictureBitmap.Source={Binding Picture} />
This link turned out to be tremendously helpful: https://stackoverflow.com/a/16103494/1809457
Also, I noticed that DecodePixelWidth and DecodePixelHeight properties were not available in Mango.
Mango Provides the PictureDecoder class, however the drawback is that it must be used on the UI thread.