The extra scrollbar is due to bug 14827. I'll look in to onmouseout and onclick not working as they are supposed to.
Thanks for the update! Updating summary...
I'm able to reproduce this bug. Perhaps the base URL for the image isn't set correctly and that's why it's not loading? Looking in to it.
Yep, that seems to be the problem, if I give an absolute URL for the image instead of a relative URL, the image is displayed...
This relates to some work Vidur did with document.open (nsHTMLDocument) setting the base URL to be that of the calling script. In this case, we are calling document.clear not document.open. This calls nsHTMLDocument::Clear() which in turn calls nsHTMLDocument::Open(), but there are two nsHTMLDocument::Open's, and this is the wrong one. (for non-script cases) Thus the base URL gets set to about:blank instead of the calling script's base URL as is needed here to load the image. Attaching a reduced test case.
Letting V pick the Milestone. :)
Fixed the document.clear() issue on 1/2/2000. Did this fix the original problem reported? Pollmann thinks so, so I'm closing the bug.
Fixed in the Feb 18th build.