What most likely happens is that you are observing wrong node change. Image is not saved in DMS flat but in a substructure. Try to export one of the DMS images into xml and see what the structure is and what are the node types. Based on that you should be able to figure what to observe. However it might be more straightforward if you modify SaveHandler for the dialog that is responsible for saving those images and resize images in preSave() operation before it's even persisted. (drawback of this approach is that it doesn't work on bulk imports via zip file or via xml import).
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