Hi Peter,
From the above screenshot I can view the URL in which there is "draftfile.php". SO I found its solution in Moodle forum posted by somebody and here it is:
hi, I've been fighting this problem for a while now.
after some serious digging, I realized that the filepicker wasn't returning the full url, only the relative one.
So I made this change to filelib.php approximately line 752, begining of function "file_rewrite_urls_to_pluginfile", you'll see $wwwroot = $CFG->wwwroot;
I changed it to
$wwwroot = parse_url($CFG->wwwroot,PHP_URL_PATH);
$text = str_ireplace("$CFG->wwwroot", "$wwwroot", $text);
And now the function and my images/files show up as they should.
Let me know if this helped any of you out, or if there is a better way to achieve what my fix did!
Have a look at this, I think this will help you out.