I found Fred Little's suggestion of the brushed Dragon possibly referring to a connection to the kokuryukai very intriguing. One thing that came to mind is the fact that the photograph was taken in pre-Kobukan days (the dojo where the kokuryukai held some of their meetings).
In fact, A Life in Aikido suggests the photo to date around 1921 (another source says 1925) and also states that it was taken at the Ueshiba Juku. So, if any connection is to be made, then Ueshiba would have had contact with the group much earlier then the Kobukan period.
Of course, even if we consider a possible connection to not pre-exist Kobukan days, it's highly possible that, if not for mundane reasons, the Dragon was ommited in the Ueshiba biography to obscure any connection.
Then we also have Ueshiba stating (source The Essence of Aikido p. 33) that on December 14, 1940 the kami messenger Saruta-hiko, announced that the Dragon King, Ame-no-murakumo-kuki-samuhara-ryu-o would take posession of Ueshiba's soul.
According to the same source, Ueshiba commissioned artist Joyo Nozawa (google turns up very little on him alas) to paint him as the Dragon King
I can't pinpoint the exact date when the painting was made but a group photograph of the uchideshi of around 1932 (Invincible Warrior p. 113 has a clearer picture but doesn't state a date, Aikido Masters p. 67 however, does) shows the painting hanging in the alcove so it was an early piece of work, incidentally, co-inciding with the time of Ueshiba's involvement to the kokuryukai...