If you haven’t got php development experience, you can do it via some clever css, basically turning the <p class="availability out-of-stock"> block into a watermark and hover it over the image.
If you have php development experience, edit the app\design\frontend\[package name]\[theme name]\template\catalog\product\list.phtml file.
You should find the condition in the “Out of Stock” bit:
Add your php code to either add class to the <img> tag or create a new watermark <img> beneath. skin it with your css.
Make sure you amend the code for both the grid layout AND list layout section of the file.