@helmstone, when problems like this happen, the best thing to do is to post specific examples. I looked up your http://thecraftofwords.com/ site, and I found an example of a broken image from the Top Posts widget:
* Photon URL: http://i2.wp.com/thecraftofwords.com/wp-content/uploads/2012/11/file000699643775.jpg?resize=40%2C40
* Original Image URL: http://thecraftofwords.com/wp-content/uploads/2012/11/file000699643775.jpg
In contrast, I see a separate image in the Top Posts widget that is working as expected:
* Photon URL: http://i1.wp.com/thecraftofwords.com/wp-content/uploads/2012/11/Pic.png?resize=40%2C40
* Original Image URL: http://thecraftofwords.com/wp-content/uploads/2012/11/Pic.png
I will see what I can find out about why that first image isn't working.
Regarding your question about turning Photon off completely, the developers are discussing an update that would make it so the Top Posts widget will not use Photon unless the Photon module itself is enabled in your Jetpack settings. If they decide to go ahead with that change, you will see it start working in a future Jetpack update.