There's a combination of things at work here that are causing the problem of transitions between your Image clips.
First, I too have noticed that dissolves only work on video tracks. They don't seem to dissolve between effects. With the Image effect applied over black video, the dissolve only effects the black video. To get around this problem, you should render your Image effects then apply the dissolve to the rendered clips.
The other problem is not having enough "head" and "tail" on the clip to allow for the overlap of the dissolve. If you have a 4 second clip and you lay them out one after the other on your edit and try to add a dissolve between them there's no overlapping video. The thing to do is create 2 edits. In the first, create your Image effects with pans and zooms as required but make them 5 or 6 seconds long instead of just 4 seconds. After you create each Image effect on this edit, render each effect separately. Do this with each Image effect you add to this edit. Now you have an edit with all rendered video of your Image effect. Make the second edit the "Record" edit (it will then have the red frame around it) and your other edit will now become a source. Mark and park the inner 4 seconds of rendered clips on the source edit and insert those into the second edit. You can now add dissolves between the clips and you will have enough "head" and "tail" of each clip for the overlap.
As a side note, I think there's a bug in the transitions panel. I've noticed the 50% blend effect inserts a Wipe transition instead.