Hi Centipede

I picked up your question on the PF forum and answered it there, but for anyone else I'll paste it here as well:

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First I recommend that you move the insert image to the same location as your drawing and keep them together for good.

To edit the link use the Numeric Edit button and select your image. A dialog will open that will allow you to navigate to the correct location of the image.

Click image for larger version. 

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Find your image file and OK the absolute link, then this dialog. For some reason that brings up the absolute dialog a second time, but just ok it. So that's 3 OK clicks.