Manual:Hooks/LinkerMakeExternalImage

Details

 * &$url: The URL of the external image
 * &$alt: The alt text of the image
 * &$img: The image HTML if you choose to override the default.

You need to return false if you want to modify the HTML of external images, returning true will produce the normal external image HTML, irregardless of if $img is set to something. Please note that you will need to include all parts of the HTML in $img, including the tag, if you choose to return false.