This is how I have mine setup. Go to My Photos and select one of your albums. On the top right you should see this...
Click on (edit)... next you will see this...
On the bottom you have Visibility. Click on the down arrow and select "Limited. anyone with a link" Click on save changes
Now... You are are ready to start linking photos...
select a photo of your choice, on the right hand side you should see this...
Click on "Link to this photo" on the bottom right. You should see this...
so now...
1. check "Image only (no link)
2. Select size "Original size is fine" (you can play with this to find the right size you want) I used Medium
3. copy the "Embed image" contents. That is what you use to embed pictures.
Click on the Insert Image icon in FSM forums (under use rich format) and paste the URL you copied in step 3.
Voila!!!