Burpee, I cant see anyone being offended by your image. Rutra is right, they follow the letter of their TOS rules but not their spirit...
In case you think the moderators are always quick to respond to complaints from viewers - I complained about an offensive image (not nudity) yesterday and there was no action yet, neither to remove it nor to tell me they dont think it's offensive.  (An additional e-mail to admin yielded the answer 'you'll be told when we meat to discuss it')So what's the point? meanwhile it continues to offend... Whatever they think should happen, in your case or mine, it should happen swiftly.
Btw, instead of waiting for the image to be restored, couldnt you just delete (or ignore) that one, and resubmit it as a new image with the appropriate thumb-nail?

"I paint that which comes from the imagination or from dreams, or from an unconscious drive. I photograph the things that I do not wish to paint, the things which already have an existence."
Man Ray, modernist painter
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