Today I ran into this issue:
On Win2003 Server images are not displayed. (GDI+ and double buffering are enabled). On Win7 Pro everything is fine. Do somebody have an idea what to do?
Looks like a bug. Maybe loading the picture from a file at run time would work around it ?
I seem to remember a windows 2003 update patch just for gdi objects. Might want to make sure that’s installed on the machine. I think it really affected png images. A little foggy on the details though
The 2003 system is now full patched but nothing happens. I’ve found your mentioned GDI+ update but it doesn’t provide a solution either. 
I can’t explain myself but after Installation of .NET 3.5 updates, everything worked.