I thought so, is it possible to shift the Media Gallery path to another FTP? I can see my gallery is going to run out of space in the forciable future. I was wondering how I could offset that without having to going a new webhost or something.
Anyway, the hack instructions are not 100%. I haven't hacked the thumbnail generation piece, but I was able to get the remote images to display once you clicked on the thumbnail to see the image. I tested this using a Flickr image I had posted.
As long as the website hosting the image allows for this type of "leeching", then you should be all set! Some websites prevent other website from direct linking to images they host (like my own personal website).