This is pretty informative:
CSS Wizardry
After reading that, I'll probably end up using <img>. I think in some way I always saw this as the only proper solution.
I do want to see if this can work though, and moreover I'd like to understand why <h1> doesn't recognize an image is there (which may be a limitation of the markup).
In other words, not solved yet, but close!
Additional reference:
CSS Tricks