You should not set x:Name on elements inside RadMenu because this triggers a bug in the Silverlight Popup control. We reported this problem to Microsoft, but it wasn't fixed in Silverlight 2 and 3. I hope that they will fix it in Silverlight 4. For the time being, if you need to access the properties of the RadMenuItems or, as in your case, the Image in the Icon property, I would recommend databinding the control and keeping references to the view model. Most of our online examples are databound, you could check them for reference. If you have questions, please, do not hesitate to ask.
the Telerik team