I typed my domain name in Google just to see what would show up and several of the first images returned are mine, but on someone else's domain. I have image hotlink protection turned on via .htaccess and the domain does not show the images but that doesn't change anything, because the site isn't trying to display my image.
What the domain owner has done is simply entered a typical text link consisting of the image url, ending in .jpg, and directing it directly to the image.
That is apparently enough for Google to think the image belongs to this site?!? Since that's apparently the case it puts back into question your hotlink protection, simply stopping someone from displaying an image is not enough, at least with Google.
What more can you do?