I figured out the issue. Needed to specify path, not DICT

app.py

@@ -116,7 +116,7 @@ def set_example_image(example: list) -> dict:
     try:
         print("here1")
         print(example[0])
-        return gr.Image(value=example[0])
+        return gr.Image(value=example[0]["path"])
     except error as e:
         print(e)
         return gr.Image(example[0])
@@ -126,7 +126,7 @@ def set_example_url(example: list) -> dict:
     try:
         print("here2")
         print(example[0])
-        return gr.Image(value=example[0])
+        return gr.Image(value=example[0]["path"])
     except error as e:
         print(e)
         return gr.Image(example[0])