Image in post not showing up as clickable link? Any ideas?

I created a custom banner in paint.net and saved it as .jpg.

I uploaded the image in a Wordpress post.

I inserted the link (which is live, I tried it in a separate browser).

Updated the page.

Image shows in the post but it's not a clickable image.

I've done this hundreds of times before but now I'm stumped as to why I can't get this to work. I've recently added Pretty Link but with or without the PL I still can't get it to be a clickable image. Is this a temporary WP bug?

If you'd like to see what I mean go to http://www.topguitarriffs.com/image-test/ I also set up a test post just to see if it'd work with Headway Theme and it still doesn't (I wanted to make sure it wasn't an issue with Heatmap). The really odd thing is that I used this same image as a sidebar widget using the Image Widget and it works fine????????????

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I used the same method for the first image here and it works? Beats me.

I'd really appreciate it if I could get some opinions because I'm baffled.

I thought it might be an issue with WP version 3.2.1 but it's not because I found one of my websites still running an older ver. but no dice.