Tidy isn't a validating parser so it lets validity errors go through. And it's a little too chummy with XHTML.
Your IMG element has a "img" attribute above in both examples. The validator is telling you that it is invalid for IMG elements to have "img" attributes. Remove the "img" attribute.
And use 4.01 Strict. Transitional was only intended for limited use for a limited time. That time has long ageo passed.
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—Tim Berners-Lee, W3C Director and inventor of the World Wide Web