This isn't really an answer to your question, but a possible
other way to do it. Have you thought about having the image
on a server and have the html reference the image on the server?
This has a sneaky side effect that you can track when and
from where people read the mail since you can check the server
log for accesses to the graphic. This of course would not
work for people reading their mail offline, but if you can't
get the attachment to work, this is an alternative.