Embeded Images not printing

I'm running Terminal services and had a user tell me that they can not print
an image that was copy and pasted in to an outlook 2003 e-mail. Both parties
are using the same e-mail.
This is across multiple term servers leading me to think it might be a GPO
or Proxy server issue but then I tried to do the same thing one term server
with me not being included in any GPO and I had the same issue. So now I'm
wondering if it was an outlook update of some sort.
Anyhow the images shows up perfectly fine in an e-mail, but when printed you
get the outline of the image size with the red X in top left corner for all
images on page including signatures..
Anyone have any ideas?

Thanks
Chip