I used photo paper the first time I tried. Mine did the exact same thing! They looked grey and blah. I was told to paint the top of the bottlecap white, let it dry and then glue the photo to the top. Yes, this worked however your paint has to be in a perfect circle or it may show.
I gave up and threw it all in a box!!
As for the bubbles. When you pour the resin on, put your mouth close to the cap and slowly exhale onto the resin and the bubbles will go away. DO NOT inhale on them, just exhale on it. This is on the instructions in the box.