If images are listed as attachment then they are not inserted in the message body. There is a difference between Insert and Attach when the sender composes the message.

There is an option to view Attached images in with the message body though. It is under the VIEW menu and is Display Attachments Inline. You need to check this option.

Hmmm, That option was checked! I cycled it off & on with no change in display attachments appear as a broken icon in message body.

If you detached the image and saved it somewhere outside of Thunderbird, then a link will be inserted instead of the actual attachment.

So with View > Display Attachments Inline., you would see a broken file image instead of the actual image. If you click on the attachment it should open using the correct software and you would see the image, but it is opening from where you saved the image. If you enabled the 'Size' column header, you would notice that the email is a small size eg: 10kb even though the attachment itself may have beem eg: 3.7 MB. This would prove that the attachment has been detached.

Well you are correct the files are not stored in the Thunderbird folder but in a temp folder. The question is how do I restore the settings so the attachment files are stored in the correct place? I did not change anything to detach them. Although I think I was having problems and tried some repair procedures,which may have impacted this.

To see if theu really have been detached:

select the email so it displays in the Message Pane click on 'Other Actions' select 'view source'

If they really have been detached look for lines similar to this: Content-Type: image/jpeg; name="20140913_143605-0.jpg" Content-Disposition: attachment; filename="20140913_143605-0.jpg" X-Mozilla-External-Attachment-URL: file:///C:/Users/XXXXXXPhotos/Family/Family/bump%202014.jpg X-Mozilla-Altered: AttachmentDetached; date="Thu Jan 22 15:55:45 2015" You deleted an attachment from this message. The original MIME headers for the attachment were: Content-Type: image/jpeg; name="20140913_143605-0.jpg" Content-Transfer-Encoding: base64 Content-Disposition: attachment; filename="20140913_143605-0.jpg"

Do you have something like that in the email source?

Doesn't appear to be the case. I'm starting to believe since most of the problems I'm having are with messages forwarded a number of times, the problem is with a pc/server configuration somewhere in the chain. Emails with attached / included pictures from the originator appear to be OK