The above solution is great and I use it. I also added an additional function for when I don't want to display the images inline in the text, which creates scrolling issues.
(use-package url)
(defun display-online-image-in-new-buffer (&optional url)
(interactive)
(unless url (setq url (url-get-url-at-point)))
(unless url
(error "Couldn't find URL."))
(let ((buffer (url-retrieve-synchronously url))
(image-buffer (generate-new-buffer "*Image*")))
(unwind-protect
(with-current-buffer buffer
(goto-char (point-min))
(search-forward "\n\n")
(let ((data (buffer-substring (point) (point-max))))
(with-current-buffer image-buffer
(insert-image (create-image data nil t))
;; Split the window and switch to the image buffer
(split-window-right)
(other-window 1)
(switch-to-buffer image-buffer)
(other-window -1))))
(kill-buffer buffer))))