I believe Donald saw that picture on whatever phone Sid had. No reason for him to make up such a story, he gets nothing out of it and in fact gets the hatred and ire from TM and family. Not that my opinion means anything, it only matters what the jury believes.
I wish Nancy L. would have asked him more questions about the picture he saw. What was in the background (if anything?). Were her eyes open? Was her mouth visible? Was it open or closed? Was it just a picture of her face/head? Could he see more than that?