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.

Scott