Images do not appear on my SSR report

Problem:

You dynamically (or not) set the URL for the image you want to display in an SSRS report but it does not display the image (red x).

The reason:

SSRS access the images folder with anonymous access which is be default not allowed in IIS7 (not sure about IIS6 and prior versions).

The solution:

Make sure anonymous access is allowed to that images folder where the image resides that you are referencing via URL in SSRS Report. Also make sure that anonymous access is set to ENABLED in IIS for that same folder. If you set the security on the folder for anonymous to read only you will not have issues with someone deleting your images.