> "You are not authorised to know the status of this item" is more informative and less misleading than "This item doesn't exist"
Well the RFC says a 404 basically means "this item doesn't exist, or I can't tell you if it does". If you ignore part of the definition, then sure, it doesn't make sense. Including that last part, then of course it makes sense for this case!
If you returned 403's, I can see people complaining that they should have access to their own images and they've logged in and checked their password/etc only to find out they've spelled the name wrong. A 403 also does not seem, to me, to cover the case where an item does not exist but a 404 definitely covers the case where it exists but can't disclose that fact.
Really the solution here would have been to, when seeing a 404, say to the user:
"The image iancal/thing either does not exist or you do not have access to see it. If you believe the image exists, please ensure you are logged in and have appropriate access rights"