Like a normal link, an image is created in two steps. The first step is to insert the image alt text and a reference id at the position desired within your content. The second step is to add the remainder of the image information at the bottom of Markdown entry. Here's an example:
This is my content and I want to display our website logo. ![BPALL Logo]  ... (more content until we reach the bottom of this entry) ... : <a href="http://www.bpall.org/images/BP50logoFinal_color75h.png">http://www.bpall.org/images/BP50logoFinal_color75h.png</a> "Berwyn Paoli Area Little League!"
In the first step, I typed the image alt text enclosed by square brackets, a space and then the reference id (a unique number also enclosed by square brackets). It's just like the first step in the link process. Or is it? Look at the start of the entry. There is an exclamation point right before the first square bracket. You need that exclamation point for the image to appear.
In the second step, I typed the reference id followed by a colon, a space, the image url, another space and the image title (the text that pops up when you hover over the image). Note that the title is enclosed by quotes.