You need to employ the correct syntax to merge images or you will get no images or the wrong images.
See
http://www.gmayor.com/mail_merge_graphics_addin.htm which shows the correct syntax and provides a means of inserting it simply.
Your construction also has an unwanted set of brackets, and the mergeformat switch is superfluous. Note that if your merge is pulling the data path from the data source, then that path must have the required double slashes for the path separators.
For copying field structures to text forums (and back to fields) you might find
http://www.gmayor.com/export_field.htm useful.