When I copy and paste the image into another office program, I get the same result - is shows the image outline, and garbles random content over the image. I've also created a new document and pasted a new image, with the same results.
I did check the docx in winrar, and the images open and display normally in the image viewer.

I've also got a post over on the microsoft answers site, and they're giving me an expanded list of things to do, some I've already done. I will try the rest of their suggestions too.