I have the same exact issue. Clicking RUN worked fine for the bike1.jpg image (Step 1). All I did was replace the 1 with a 2 but the bike2.jpg (Step 2) doesn't work.
I added the space between the ending quote and slash, as you suggested, but that didn't work either.
To clarify, there isn't a specific error message. Step 2 of this activity simply shows the red X as in the screen shot by the OP.
Now I'm stuck, too, and can't progress. Thoughts?
I just tried using the BACK button then clicking NEXT while viewing the Step 6 activity. That didn't change anyhing. However, when I used the course navigation button in the lower left corner of the screen and selected 7. Adding Images I noticed that the bike2.jpg image was being properly displayed, but the NEXT button was still greyed out. I clicked RUN and it worked.
Odd quirk, but I'm all set now.