Blogaway had been using PicasaWeb APIs to store the photos that you publish with your blogs on blogger.com. However, sometime back, Google deprecated these APIs, and thus, users were not able to post to their blog with images.
We have released a temporary update to the app, and are saving your blog images to cloud storage. For now, you can continue working with Blogaway and images in your posts.
However, soon, we will be updating the app to give you more control over your photos. We are trying very hard to fix this issue. There are quite a few problems that we need to address.