My best Markdown experience so far on iPad is with Working Copy. It is primarily a Git client. The preview mode handles pictures well, but for editing you are

My best Markdown experience so far on iPad is with Working Copy. It is primarily a Git client. The preview mode handles pictures well, but for editing you are stuck with a basic code editor. Using the preview mode I can even navigate to other notes in the same repository via links in the notes. Might not work for your use case. If it sounds interesting, give it a try.