The issue is the selector that is inside of the loop. It's finding all of the img tags, and not just the one inside of the desired li.rssitem.
<script type="text/javascript">
$(document).ready(function() {
$("li.rssitem").each(function() {
$(this).find(".rssdescription a img").insertBefore("h3");
});
});
</script>
Let me know if this solves the issue that you're having.
UPDATE: Got rid of the remove() as it's gonna screw with ya. Thanks DT.