The easiest way how to convert tar.gz to img, would be to first decompress the archive and then create a disk compilation in any of the available formats, including disk image format from CloneCD (.img).
For example using DropDMG utility for Mac allows users to create / convert various TAR compressed files (.tar, .tar.gz) to .dmg or .img disk images. This procedure will basically take the files and create a disk image from the content.