As per my understanding in Islam they are not allowed to depict the Prophet Mohamed in any form.

Persia had a long tradition of portrat art. I've read there there are still a few paintings depicting the Prophet in private collection in Iran. These are usually illustrations of events rather than portrats. Note that Hebrew religious practice avoided the depiction of God, other than through abstract symbols. There were some exceptions but the Hebrews seldom represented God with a statue or painting. Both the Muslim proscription and Christian Iconoclasts seem to have drawn part of their arguments from Hebrew ideas. The early Christan church may have not used art very much. After the Roman Emperor Constantine made Chritianity the offical religion of his empire much pagan art was incorporated in to the Christian church. The connection between these pagan symbols and residual pagan religious practice were one concern of the Iconoclasts. The ancient Hebrews seem to have wrestled with this problem as well. Moses had to destroy statues and scold or punish groups amoung his people who thought to worship in other ways. Exactly what the Quran says about this is not precise since the original Arabic of the 7th Century AD can be argued several ways. It is like trying to read the Bible in the original Greek & Armiac. Only a few experts actually can, so they can tell us what they wish.

It is so much easier to be from a lutheran country: The basic proporsition is you cannot offend God (I know the catholics have a slightly different attitude). It is not blaphemy to suppose you can - just stupid.

Quran do not tell anything about painting. And in fact Hz. Muhammed has been painted in early years of Islam. Although there were 2 different groups one favors, and one against of painting. At the 8th century iconoclam wars started at Byzantium. Abbasid Caliphate banned all kinds of paintings and sculpture fearing the iconoclasm wars would spread into Caliphate.

You are right, Muslims are not allowed to create pictures of human beings and animals. So no painting or picture etc of Prophet Muhammad (Peace Be Upon Him) is available. But the Hadith and Sunna of the Prophet Muhammad (Peace Be Upon Him) give very much detailed information of the look,dressing etc of Him. I myself have not read much about this topic. But the little I have read about the Prophet(Peace Be Upon Him) tells that he had a beard on his face. He had a very impressive personality, His clothing was simple but neat and clean. He wore an umamah (turban) on his head. He had a very gentle personality with a light of truth and honesty on his face. According to some historical writings He was a very beatiful man like Hazrat Yousaf or Joseph(Peace Be Upon Him).