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this is starange everyone face same issue like me. does anyone out there have a step by step guide?

What I can tell you from our experiences is that pulling pictures from a different website (as long as it is also hosted on a differnet server) makes sense according to the performance of the site where you display the pictures. As long as you have verified the sites within WMT you don`t have to worry - if you have outsourced pictures and they are used by several other sites which you also own or maintain, there is no problem using a picture sitemap for several times and all your domains. Having thousands of pictures in a shop at least means to consider outsourcing the sources of your pictures and pulling them to the original site. You have to think about how much pictures you have - I would always recommend option 1 as you already mentioned...