The tags can be replaced by an image of your choice in blogger by just replacing and adding small pieces of code in the template by using Edit Html of the layout.

Preview:

Tags Replace By Image

Here is what you should do:
1. Go to Layout->Edit Html
2. Download Full Template (This is to backup your template)
3. Check the Expand Widget Templates
4. Now search for the code below

<span class=’post-labels’>
<b:if cond=’data:post.labels’>
<data:postLabelsLabel/>

5. Replace the code in bold by this code:

<img src=’http://bloggertipspro.googlepages.com/tags.png’ style=’border:none; background:#FFFFFF;’ title=’Tags’/>

You can replace this http://bloggertipspro.googlepages.com/tags.png by the link of the image you want to display

6. Save the Template