I was helping on a Windows Phone application where the requirement was to cache the images the phone downloads on the isolated storage for offline viewing.
I wanted a solution which was simple and as transparent as possible. While researching I found  someone wrote a Silverlight converter for loading images from isolated storage. Taking that as a base I created a converted which can
  1. Load image from web (http + https), and persist it to isolated storage.
  2. In case of network connectivity issues can load the same image from isolated storage. It does that by mapping the http url to a isolated storage location.
  3. In case the network is down and the image is neither there in cache, loads a default image, passed as parameter to converter.
Here is the gist for the implementation.

To use the converter
  1. Import the name space.
  2. Declare the converter as resource.
  3. Set the Image Source Property to use this converter like this