I have the same problem with 2016.2.607 when saving a RadFlowDocument as PDF.
To solve this, I had to do first create a new image with the existing data and then resave it as a PNG:
RadFlowDocumentEditor editor =
Paragraph imageParagraph = datacell5.Blocks.AddParagraph();
//Create new image as the PDF export won't display
System.Drawing.Image img = System.Drawing.Image.FromStream(ms);
//Must resave the byte from ms to ensure that it can be inserted into the PDF properly.
(var msImg =
newHeight = (
)(img.Height / ((
)img.Width / 100));
Once I did this step, the images were correctly added to the PDFs.
Hope this helps!