I faced the same issue, but was never able to resolve it using this.
 
Maybe it was because I was testing using localhost and the responses were too fast..but dunno!
 
Then I tried doing it using the following -
 
Ajax.Responders.register({
  onCreate: function(request) {
    Element.show(loading);
  },
    onComplete: function(request) {
      Element.hide(loading);
    }
});
 
This was my global spinner image. This always worked fine.
 
Maybe you would want to give it a shot.
 
Thank you,
Mandy.
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