There is a new defect that has been reported as a result of an issue that was brought to us: CLRT-77698 Unable to save custom gel scripts due to Image tag
Until a knowledge article is created and published for it, I just wanted to share it with the community here and now as I know there are a number of GEL script authors among us, as well as this being something that may appear unexpectedly for those doing upgrades.
Once an article is posted I will follow-up if I can with a reference to it. In the meantime, I've put my findings about it along with a workaround approach to this specific defect here: Modifying XML/HTML using XSLT in a GEL script
Note that despite the defect's title, it turns out not to be the <IMG ... /> tag itself that causes issues, but any tags that have an attribute with the name 'src' inside and as part of the GEL script body. Also if you do encounter this problem and can reference the defect above when reporting it, it may help expedite confirming that the problem encountered has this cause.