You can't extend the CEWP, so your only option is to work out RAD, or develop an alternative your self.
James McCormack had a similar issue (needed to extend CEWP).
He used reflector to dig into the CEWP, and took the relevant code, and implemented it in a visual web part solution. His solution is targeted at 2010, but you could use a similiar approach and leverage Jan Tielens SmartPart ( http://smartpart.codeplex.com/ )
You would need to add the relevant code of course to implement an image manager type solution.
Here is the link for James' post: http://zootfroot.blogspot.com/2010/09/develop-custom-editable-visual-web-part.html
This is code for uploading image from Charles Lee
At this point, you would need to have the full URL path to the image, and inject the tag into your editor.
I've always been fond of RightJS's RTE. I admit, I haven't implemented it for use with images, but there is a post on SPServices forum that discusses how to handle file uploading. You should be able to extend the RTE to grab files from desktops instead of URL's and send them to the appropriate library.