how can I override theme_image() on a custom node template, only Can anyone explain how to override theme_image() but only on a specific custom node template? (i.e. node--artist-page.tpl.php)

As I understand you shouldn't put things like theme_image() in a .tpl file, but the theme devel module it's not offering up any candidate function name overrides except mythemename_image(), which would apply to all images on all pages.
As I understood your problem, you need to redefine theme_image function only for custom template. I found following link for you that can help you to resolve your problem.

How to redefine default theme_image() function?

Another way is just override theme_image() function that you don't want to follow:


Find the original theme function.
Copy and paste it into your template.php file.
Change the beginning of the function name from theme_ to yourthemename_.
Save template.php, clear the site cache, and reload! 


Keep us posted with what you figure out.