As i have mentioned in another thread, there are some issues with pep not pushing notification to contacts after updating a node… maybe it has sth to do with it. But do you realy know that all your contacts use conversations or another client with xep0084? Otherwhise u need the xep398 plugin on the server.
Conversations uses XEP-0084. The client should get notifyd by the server with an message event (metadata), if the contact changed his avatar.
Furthermore there is/was an issue in the latest Openfire Release (maybe some versions earlier too) which prevents sending message events. So maybe you did not get notifyd.