The way I understand it, initially it displays the images while the images are still hosted in the other blog's media library. Transferring the images to the other blog's library is a different process from transferring the regular content and takes a bit longer. We usually advise people to set the blog they no longer want to use to private, rather than deleting it, to prevent issues such as these.
You can try re-importing the xml file but I don't think it will help (and might cause more problems), as it doesn't include the actual images, but only pointed to where they used to be hosted on the old blog.
You can upload multiple images by going to Media ->Add New in your dashboard, but you'll have to add them back into the posts one by one.