This might be easier for me to debug with a repro. If you don't mind could I ask you to send an example file to jbtuason/gmail? You can trim to just the passage with encoded strings, or just send the encoded strings + tags on their own.
The project I was trying to convert is https://azulookami.itch.io/finding-a-place (NSFW project, SFW project page). At the time I first tried using the Twine to Ren'Py tool, the project artist had said in the comments that they were looking to convert the Twine project to Ren'Py, and were looking to pay someone to perform that conversion. Since then, the project artist has apparently found someone to pay for that conversion (that person is not me), so my warrant for trying to do the conversion myself (getting that project rolling again faster) has been effectively obsoleted.
You should be able to find a relevant <tw-passagedata> block by doing a search for (tags="Twine.image") (without the parentheses).
Thanks! Looks like the problem had to do with passages that had no links whatsoever (which coincidentally were the Twine.image ones). It's not too hard to add an option to skip them and maybe throw in options for other tagged passages to be skipped as well. However, even after that addition it looks like for this project in particular there are other possibly non-standard characters that would cause problems with the decode as well as custom macros that wouldn't make this a simple conversion.