Inline image not showing
1) When you are adding a new node, check the text format option under the Body field. Ensure that it has not been set to "Filtered HTML" (if you are using the Standard profile) or some other text format that will filter out HTML tags outside a preset whitelist. However, this doesn't explain as to how the image shows up on re-save.

2) Disable your custom module and try once. Ensure that it is not affecting anything. Because, Insert, by itself, seems to be okay. Just checked out this demo.