One suggestion for accomplishing this functionality is by using ItemTemplate and image control inside it. In the code behind iterate through the items and access the image control, attach 'onclick' event by passing panelitem text/value to event handler. Now in the event handler get the corresponding panelitem and expand it using client code. The follwoing documentation shows most important client methods and properties of a RadPanelBarItem.
Feel free to ask if you experience any problem in implementing this.