I've had a stubborn image too, that wouldn't go away by setting the Image and InitialImage to null. To remove the image from the pictureBox for good, I had to use the code below, by calling Application.DoEvents() repeatedly:
Application.DoEvents();
if (_pictureBox.Image != null)
_pictureBox.Image.Dispose();
_pictureBox.Image = null;
Application.DoEvents();
if (_pictureBox.InitialImage != null)
_pictureBox.InitialImage.Dispose();
_pictureBox.InitialImage = null;
_pictureBox.Update();
Application.DoEvents();
_pictureBox.Refresh();