Well, this will display the thumbnail. However, the <content> tag of the RSS feed has already given the image a link to the full size image and not the post.
{exp:magpie url="http://stark23x.com/index.php/weblog/rss_atom/" limit="10" refresh="720"}
{items}
{content}
{/items}
{/exp:magpie}
What you might consider doing is making a field in your weblog that is specifically set for ONLY the URL for the thumbnail and then you can modify the Atom feed to have that field in the <content> tag and then do something like this:
{exp:magpie url="http://stark23x.com/index.php/weblog/rss_atom/" limit="10" refresh="720"}
{items}
<a href="{link}"><img src="{content}" /></a>
{/items}
{/exp:magpie}
