For those who couldnt get one of these solutions working: Send inline image in email Following the steps laid out in the solution offered by @T30 i was able to get my inline image to display without being blocked by outlook (previous methods it was blocked). If you are using exchange like we are then also when doing:
service = new ExchangeService(ExchangeVersion);
service.AutodiscoverUrl("[email protected]");
SmtpClient smtp = new SmtpClient(service.Url.Host);
you will need to pass it your exchange service url host. Other than that following this solution should allow you to easily send embedded imgages.