Theft of material.
It's an almost trivial matter to change the image based on the referrer. I do it quite a bit.
Images that show text like "this site stolen from xxxxxx", or random redirects to rotten.com are easy.
As I said to Bryan, contact google (since it's hosted on one of their IPs), point out that they're hosting infringing content and request they either force the content to be taken down, or take down the entire site. (There are precedents).
There are any number of ummm, more underhanded things you can do, but they're probably (or in many cases, definately) illegal and could find you on charges instead. Resist the temptation to go that route.