Multiple domains images in transformation

Your statement is confusing, what do you mean by this:

"it is taking the source of the first domain, not the domain the product is under"

I am currently running two sites under one Kentico installion. The transformation is taking the link of site A not site B when site B is where the image is nested under.

it gives me a link starting with ~/ insted of the link of the domain.

Have you tried using this:
<%# GetFileUrl("ImageField") %/>

This will return relative path of the image in given field. So, you will need toadd just the domain name and compose the IMG tag source parameter like http://domainoftheothersite.com + <%# GetFileUrl("ImageField") %>:

<img src="http://domainoftheothersite.com/<%# GetFileUrl("ImageField") %>" />

Jason,

How do you have your sites configured in the Sites app? Do you have the actual domain you're using in the domain box or are you using some alias? What will be returned with the GetAbsoluteUrl() function is the value that's in the Site domain name box.