The svg document is using a default namespace:
<svg xmlns="http://www.w3.org/2000/svg" ...
Further, the xlink namespace is used for image@href attributes. You need to register the default namespace and the xlink namespace using registerXPathNamespace():
$svg = new SimpleXMLElement( $svgString );
// register the default namespace
$svg->registerXPathNamespace('svg', 'http://www.w3.org/2000/svg');
// required for the <image xlink:href=" ... attribute
$svg->registerXPathNamespace('xlink', 'http://www.w3.org/1999/xlink');
// use the prefixes in the query
$result = $svg->xpath('//svg:image/@xlink:href');
echo count( $result ); // output: '2'
for ($i = 0; $i < count($result); $i++)
{
var_dump( $result[$i] );
}