With regret I have decided to stop supporting the Images outside of p tags option in Wyvern. I created the option when Wyvern was originally WYMeditor for ExpressionEngine as a way to provide better HTML output from the editor. It's not very common that you want your image tags wrapped in a p tag. If anything you don't want them wrapped at all, or within a span or div tag as a last resort.
The option works fairly well with only 1 or 2 images are in a field, and not near each other in the DOM. It fails when you try to position 2 images next to each other. If the option has been working for you, then feel free to continue to use it. For new users, use this option with caution, and knowing that it may not work and could possibly inadvertantly remove images from your content.
So what is next? Well, I want it to work for our client projects just as much as you do, so this feature is still on my hit list, but unfortunately I can't respond to support tickets regarding it anymore.