<p>I have a SSRS 2005 report that has a number of images in it.  The way that I have the images included is I have an image object with the URL set in the value property.  The actual images are hosted by an IIS virtual directory on the same server.   I'm doing it this way because I need to dynamically change the image source using an expression depending on the data within the report. </p>

<p>The problem is that the images work great when previewing the report in Visual Studio but do not display when the report is deployed. When I look at the HTML rendered by SSRS the SRC attribute of the image tag is an empty string.</p>

I have had this problem before.
You should check to see if you have any warnings being thrown when you deploy the reports. A rsWarningFetchingExternalImages warning means that reporting services is having problems anonymously accessing the images.  This could be because anonymous access is not properly configured in IIS or, as in my case, you could possibly have a problem with the MIME type for the image you're hosting. I was trying to host PNG files and it worked when I changed the images to GIFs.