I don't know if this will help anyone else who has problems with images not displaying, but with the assistance of my host we were able to troubleshoot the problem I was having. This may or may not be unique to my server, but it's worth checking.
Below is the response I received from the support tech:
I was able to reproduce the issue so I investigated it and found that the rule in /home/mysite/public_html/.htaccess file is causing this issue. The following rule is the one causing problem that I have disabled with '#' now:
#RewriteRule .*.(jpg|jpeg|gif|png|bmp)$ - [F,NC]
The site is loading the image fine. Please check with your developer in order to setup the rule in .htaccess according to the requirement.