I think it was about a year ago that Google said no more images next to Adsense ads. Ads next to images were producing poor quality traffic for advertisers because people didn't realize what they were clicking on. Publishers loved putting images next to ads because it gave them a much higher CTR and bigger checks. I found a site that competes with one of mine still doing this about a month ago and reported them to Google. Tattle-tale, I know, but they are my competitor and they aren't playing by the same rules I have to. Anyway, i just checked again..and still they are doing it. They are doing it quite blatantly right on their homepage:

Sneaky Devils! Google don't you read your email? Or do you just choose not to enforce your ToS?

Google