Migrants to IJ, 2007

You could interpret it to mean that, so long as the artwork (or other representation) is not hosted at LJ, such as in their Scrapbook, merely linked (from a site you have permission to hotlink to... don't want to run afoul of the other provision), it's okay.

Somehow, though, I don't think that's what they mean.

I am glad to see they remove the atrocious provision they were discussing last August about users being responsible for external links.