LinkIt doesn't appear to properly link images in WYSIWYG

Hello,

I've been using this module as part of Panopoly (I just upgraded to Panopoly 1.1), and I'm seeing some unexpected behavior. Basically, if I try to use LinkIt to add a link to an inline image in a WYSIWYG textarea, both the image and adjacent text ends up being part of the link. I've done some research and I'm pretty sure the issue is due to LinkIt. Here's how to reproduce using Panopoly 1.1 (this is the easiest/fastest way to get everything configured to reproduce this issue):

1. Start with a fresh copy of Panopoly 1.1.
2. Click to create a new node of type "Content page".
3. Add some dummy text in the body, and use the "Add media" button to add an inline image (I used "Display as" = "Quarter size"). See http://note.io/OkqlaI
4. Next, select the image and click the "LinkIt" button and add any valid target path.
5. After clicking the "Insert link" button, note how _everything_ is now a link. See http://note.io/1goQSLu

This appears to be an issue with the fact that the Media module doesn't output <img> tags, rather it output Media tags (for example: [[{"fid":"8","view_mode":"teaser","fields":{"format":"teaser","field_file_image_alt_text[und][0][value]":"Superman","field_file_image_title_text[und][0][value]":"Superman"},"type":"media","attributes":{"alt":"Superman","title":"Superman","height":"293","width":"240","class":"panopoly-image-quarter media-element file-teaser"}}]]). It appears that LinkIt doesn't properly handle figuring out exactly what is supposed to be linked when a Media tag is selected.

Let me know if I'm on the right track.

Thanks,
-mike