@mk@oracle.skilledtests.com AndStatus supports image attachments in GNU Social for almost a year. I mean it works correctly with many servers. So your report means that oracle.skilledtests.com is configured somehow differently, e.g. has some unusual or outdated version of a software.
So my recommendation is the same as by any other software developer: please update to the latest versions of software first and then we will be able to investigate the problem further.
Start from updating GNU Social server software.
As to Mustard app, it implemented support of StatusNet much earlier than AndStatus and so no wonder that it supports some old its version OR unusual configuration.