umm your config file appears fine. The problem is that you cannot manage images uploaded in ftp, at least at this point. You dont need to manage your images at all, just create an adoptable from ACP and enter your full image url (
http://www.adragonsden.com/adopt/stage1/pika1.jpg) in the text field 'Adoptable's Egg (First) Image'. You can see how to do this from the screenshot below:
