From the provided information, I assume that you are trying to resolve a relative path to an image in a web application. I tested with version 126.96.36.199 and seems to work as expected on my side.
However, there is a known issue with resolving the relative path of the PictureBox in a web application that was introduced in version 188.8.131.526 (R1 2018 SP3). We have logged the bug in our system for fixing, and it should be fixed for one of the upcoming service packs.
Currently we cannot offer a suitable workaround with the latest versions, except using absolute paths for the images or downgrading Telerik Reporting version.
But in case you are experiencing the issue using version older than 184.108.40.2066, I would ask you to open a support ticket and send us the problematic project for further investigation.
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