Misplaced Underlining in Image Links

I have noticed this small issue on two major sites now, one of which is Blogger. These sites are styled in such a way that links do not have underlines unless the mouse is over them. When I mouse over a link element that contains an image, an underline appears only under text, which in this case is a single space, so the result is a bizarre extra line segment. In this picture, my mouse is over the blue creature:

There are two simple solutions I can think of for this problem:

1. Remove the space character and create padding some other way
2. Use CSS to remove hover underlining for the link containing the picture