SYMPTOM:
When sending a Report Services document to PDF or Excel that contains an image through Strategy Narrowcast Server, a red X is displayed in place of the image, as shown below in the PDF example:

The Report Services document executes correctly in Strategy Developer.
CAUSE:
The image is using a relative path such as 'images\ScoreCard.bmp' as viewed in the Property List:

ACTION:
Use %%SYSTEMROOT%%\system32\ on the Strategy Narrowcast Server machine. This is the default path of the account connecting to Strategy Intelligence Server from Strategy Narrowcast Server (MCISM7.exe) spawned by the Execution Engine. For Windows 64-bit environments, the correct path is %%SYSTEMROOT%%\Syswow64\.
Using the example shown above, an images folder should be created in %%SYSTEMROOT%%\system32\ and the image (ScoreCard.bmp) should be placed in this newly created folder.