Are you creating the contact first, then adding the picture? Also when you create the contact, does it save to the phone or gmail? Try logging into gmail, creating a new contact with a picture and see if it syncs to the phone complete. It sounds like the contact is being saved to the phone or if the phone has one, the sim card. Which could explain why the picture is not saving correctly. There is a way to make the phone always save new contacts to gmail, but I do not know how to so that on your phone. When you look at all of your contacts, some phones will show a small icon next to the name to show where it is saved (sim card, P for phone or G for gmail) does yours tell you?