Even after logging and analyzing all SQL queries I still can't find where in the DB K2 image info is stored. And there is a reason why: It doesn't use the DB at all.
Images are stored in
/media/k2/items/cache/
/media/k2/items/src/
using the md5 sum of the K2 item ID as the base of the filename. It then looks on the fly for images in these folders to display when you browse the articles.
There is a bit more info here:
Where does k2 componet store its images in the database?
I have now made a script that will convert embedded images to K2 external images.