I think using this will be the easiest
new Uri("pack://application:,,/FolderIcon/" + youImageICO);
or this code will work on any machine that if your folder is in your root project if you want to change it... just change this section @"..\"
public static string bingPathToAppDir(string localPath)
{
string currentDir = Environment.CurrentDirectory;
DirectoryInfo directory = new DirectoryInfo(
Path.GetFullPath(Path.Combine(currentDir, @"..\..\" + localPath)));
return directory.ToString();
}