I think this is an issue of DPI. PD4ML seems to increase the image size by about 20%.

What DPI does PD4ML render at?

If I know that, I can potentially specify a smaller-than-normal height and width for the images in my image tags, so they render properly.

To test this, try rendering any image and you will notice it’s larger on the PDF than on the web page, causing it to be pixelated.
Like so:

(Haven’t tried it without the width/height specified – could that be the cause?)