In your original post, you said:
In that case, you should be able to use:
{IF {INCLUDEPICTURE {IF TRUE "{MERGEFIELD SourceFile}"} \d} {INCLUDEPICTURE {IF TRUE "{MERGEFIELD SourceFile}"} \d}}

Otherwise either of the following should work (I've tested & confirmed them):
{IF {INCLUDEPICTURE {IF TRUE "C:\\FPC_Directory\\{MERGEFIELD FileName}"} \d} {INCLUDEPICTURE {IF TRUE "C:\\FPC_Directory\\{MERGEFIELD FileName}"} \d}}
{IF {INCLUDEPICTURE {IF TRUE "C:\FPC_Directory\{MERGEFIELD FileName}"} \d} {INCLUDEPICTURE {IF TRUE "C:\FPC_Directory\{MERGEFIELD FileName}"} \d}}

As before, the field construction in your latest post looks OK, though there should be a space between the }{ pair, as in } {. The field codes I've represented above have all the unnecessary spaces removed.

When the merge using such fields is executed, your output file should have the images and no links. The only way I can generate a file with links with the above field code is by saving the merge preview.

__________________
Cheers,
Paul Edstein
[Fmr MS MVP - Word]