The problem is that the HTML image, generated automatically by default post editor of Blogger, displays a thumbnail and not the original file hosted on Picasa.Because of that the animation does not work.
This problem can be solved by editing the HTML manually by Replacing the URL of the image displayed in the post with the URL of the link created automatically by Blogger.
In the example below are highlighted respectively: The URL of the original image (green) and the URL of the thumbnail generated by the Blogger post editor (in red):
<div class="separator" style="clear: both; text-align: center;">
<a href=" http://3.bp.blogspot.com/_mUT2piLt5H0/S8XXw_5DCdI/AAAAAAAANZU/ugV2mhfq2QU/s1600/YouTubeLoad.gif " imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="258" src=" http://3.bp.blogspot.com/_mUT2piLt5H0/S8XXw_5DCdI/AAAAAAAANZU/ugV2mhfq2QU/s320/YouTubeLoad.gif " width="320" /></a></div>
Just replace the address highlighted in red with the address highlighted in green and the animated image will appear on your blog.
<div class="separator" style="clear: both; text-align: center;">
<a href=" http://3.bp.blogspot.com/_mUT2piLt5H0/S8XXw_5DCdI/AAAAAAAANZU/ugV2mhfq2QU/s1600/YouTubeLoad.gif " imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="258" src=" http://3.bp.blogspot.com/_mUT2piLt5H0/S8XXw_5DCdI/AAAAAAAANZU/ugV2mhfq2QU/s1600/YouTubeLoad.gif " width="320" /></a></div>
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