Hi DM,
I'd like to know if you are talking about the image that is inserted in the email body directly or the image attached as an attachment.
For the image attached as an attachment, it won't be downloaded automatically (but manually we can download it). If you are referring to the image that is inserted in the email body, please try the following methods to give it a shot:
1. Check Internet Options Encrypted Page Setting.
In Internet Explorer go to (the gear, Tools), Internet Options, Advanced tab. Look under the Security section for Do not save encrypted files to disk. Untick this setting and Apply. Restart Outlook. (If you don't use Internet Explorer, you can go to Control panel, Internet Options or just type Internet Options in the Start menu Search.)
2. For the "not downloading image", whether it shows as "blank" or a "red X". If the former one, you can check the Picture Placeholder setting.
Click the New Email button or press Ctrl+N while viewing the Inbox.
Go to the new message's File, Options dialog.
Click Mail, then Editor Options
Select Advanced and look near the bottom of the dialog for the option to Show Picture Placeholders.
check the picture placeholder setting
Uncheck the box to Show picture placeholders
Close the dialog then close the message.
3. If the "not downloading image" shows as the "red X", you can refer to https://support.microsoft.com/en-us/help/2638687/pictures-cannot-be-displayed-and-are-shown-as-red-x-in-outlook.
Meanwhile, as you mentioned that it works fine if you un-install the new Windows update, I suppose it might be related to the Windows update(s), so you can also try creating a new Windows profile. At the same time, make sure your Outlook is newly updated.
Regards,
Alan
