Quick, what's this a picture of?
(If you can't tell, pull back and try again.)
Adam Connelly paints pictures of pornographic images, pixellated so that it's our minds, not the paint, providing the salacious details. He says: "Drawing its subjects from the vast pool of freely-available Internet porn, my work delves into issues of public and private identity, privacy, censorship, information sharing, and information awareness." He doesn't mention copyright (though his site claims absolute control over images of his paintings, ignoring the possibility of fair use).
Assuming that some of the images he copied were not licensed for commercial derivative re-use, would he still have a fair use defense? It's pretty clear that he would, given the change in meaning and the change in quality of reproduction--this is the art-world version of Google Image thumbnails. Plus he's starting with images of naked women, and sex is a great subject for fair use.