If the Lorem ipsum text is just normal paragraph text then it should easily work with:
Code:
div.image50L {width:50%; float:left}
div.image50L img {width:100%; max-width:1000px}
<p>Some paragraph before the image.</p>
<div class="image50L"><img alt="…" src="…"/></div>
<p>Some paragraph the will flow around and to the right of the image.</p>
Try that with the colored border and the image should be the only thing with the red border.