I have an automation job which embeds a html file with image within the body of an email activity and sends an email.
I receive the email, but the image is broken/not rendering. In TDP 5.4, it now references the absolute directory for the image within the html source, instead of the cid value. Viewing the source code, I noticed the following differences:
I'm using TDP 5.3 and had trouble getting an image to display in the html when viewed by my email recipients. I'm publishing email using TIC. I never could find that the image was every truly embedded. I always saw just the path in the html. But since I had the image in that path I could see the image. So I placed the image in the same path as shown in the html and that worked for me.
Also, in the Toad Data Reports, which I am using to generate the html, there is a new option of "Mail friendly html". Not sure what that means as it isn't listed in the help file.
I know I might be generating html a different way than you but thought I would share my observations and solution for the same problem.