Twitter has released Twitter for iPhone v3.0.1c, you can use Steply image service on this new version.
Go to Settings » Services » Image Service » Custom ,
In the text field, enter http://steply.com/twitter/o/photos
You need to upgrade your Twitter for iPhone v3.0.1c to use the new API.
You must own a Steply account and linked your twitter account before making all this works.
Go to http://steply.com/settings to link your account to Twitter.