Photo by me!
It took me a bit of digging to figure out how to fade out a picture, change the src, then fade it back in. I started out trying to use Scriptaculous but I got stuck trying to get the queue setup to wait until the image was faded out to change the src. I ended up using jQuery which also gave me a bonus, the solution is unabtrusive.
Here are the application.js and show.html.haml files from my project.