Hi
If I add the image file to the reports section in the solution. "Add existing item" and select an image.
It is available in the drop down when I choose external source in the image control on a report.
It then works in dev (B.I studio) and on my local ReportServer. I can then upload a different image with same name and the Report Server picks it up.
The problem form organisation viewpoint I have rdl files and jpeg/gif files mixed up.
My ideal solution would be to have an /images/ virtual directory with the images in.