Axial fast spin echo (FSE) T2WI of the right orbit demonstrates high T2 signal expanding the dural sheath of the optic nerve. This patient had a space occupying lesion (not shown) and raised intracranial pressure. As most standard brain MR studies will have only axial T2 images, which are usually non-contiguous (i.e have a skip between slices), the optic nerve will not always be captured in an image. Coronal images are often helpful, (e.g coronal T1WI of same patient here) demonstrating a cuff of CSF signal surrounding the optic nerve.

Papilloedema is really an ophthalmoscopic diagnosis, referring to swelling of the optic disc. The MRI appearance relates to the dural anatomy of the optic nerve, which is continuous with the subarachnoid space, thereby allowing increased intracranial pressure (ICP) to be transmitted to the optic disc. The causes are protean, a veritable Augean stable of conditions (see Radiopaedia.org article here), the most common of which would be an intracranial mass or collection.
The differential is also broad for the fundoscopic findings, although most have quite different MRI appearances and should not cause too much confusion. These include: optic neuropathy, drusen, malignant hypertension, optic nerve papillitis and of course optic nerve tumours. Another cause is idiopathic intracranial hypertension.

Reference: eMedicine.com

Credit: Dr Frank Gaillard (radpod.org)