I tried to the same but it was too complicated, I didn't want to study and modify too much the code. I think too that the way to attach an image is not so intuitive.
So, what I did was:
1) Rename "Attachments" to "Attach images and files"
2) Remove the button "Image" in the upper buttons bar. I'm not interested that users place images from other web sites (99.9% of my users in the old VB forum didn't use it) and I know that it will confuse those who just want to attach an image.
P.S. I'm not criticizing PHPBB (It's great!), I hope that my comments will be useful.