I'd suggest putting some debugging in there - perhaps an
EXISTS(filename)
to see if the image name you are creating actually exists.
Also be aware, if you are using the SV PDF converter your image file has to be really small - it can't handle large images.
and, I'm not 100% sure, but I think SetTarget on a report takes a "detail name" as well as the report. Check the docs for more on that.
cheers
Bruce