You're probably getting tripped up by   print "Content-type: image/gif\n\n" . <IMAGE>; which is going to give you the first "line" of the image. The concatenation operator forces scalar context onto <IMAGE>, which isn't what you want.

  print "Content-type: image/gif\n\n";
  binmode(IMAGE);
  print <IMAGE>;
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should do it for you. (I threw in the binmode() in the unlikely event that you're running on Win32.)