Hi Sam,
I've looked into this a bit further and it appears that it's just a UI problem in the extension, the actual image served to Google Merchant Feed is the correct variant image, it's a bit misleading but the good news is that we've successfully published our feed and it has the correct images.
One thing I wish we could edit is the product ID that gets automatically assigned by the app, names like xxxxx_shopify_xxxxx do not mean anything when we refer to them in Adwords, we need to be able to specify better unique identifiers.
Anyway it would be great if we could keep each other updated on any tips/tricks and share our knowledge, maybe we can work it out between us.
Cheers
Stuart.