Don't specify the image path to your hard drive and you may not have the problem.
I guess this will fall in the realm of "some ridiculously stupid mistake".
I must have just hopped into the page in Dreamweaver without switching the site.
since I have this image in most of my sites I mistakenly grabbed it from the last site I was working on.
In my defense, I have just upgraded to Windows7, AdobeCS4 Suite, Office 2007 and several other software upgrades.
I am getting used to things not working as expected.
I made the change and it is looking right now.
Thanks for your help.