As far as I know, shouldOverrideUrlLoading is not called for images but rather for hyperlinks... I think the appropriate method is
@Override
public void onLoadResource(WebView view, String url)
This method is called for every resource (image, styleesheet, script) that's loaded by the webview, but since it's a void, I haven't found a way to change that url and replace it so that it loads a local resource ...