The Windows Phone Nodo Update may have created a image scaling bug with OneNote. Images look clean and crisp when viewed from a computer but after being synced to OneNote, the note becomes distorted, washed out and pixelated.
It was first suspected that the problem could be an optimization issue to save network traffic but when the notes were emailed and opened via computer, they looked fine.
To those who have updated their Windows Phone with NoDo, have you seen image scaling problems with OneNote? To test this, simply "print" any document or web page with text to your OneNote notebook that is synced to your Windows Phone. Sync and open the note on the phone and zoom in on the image. Are your results similar to what's displayed above?