Not sure if it would help, but you could download the source for my Task-It application at http://bit.ly/bhgRLi
I use a two-level context menu that is associated with a RadGridView. It is in Grid.xaml in the Views directory of the TaskIt.Modules.Tasks project (you'll see it visually if you run the app, go to the Tasks page and right-click any item in the RadGridView).
In this context menu I am binding the Icon, Command and Visibility properties, though I am doing it via the MVVM pattern. So the properties I am binding to live in the ListViewModel class in the same project's ViewModels directory.
You could step through the code to see how I am obtaining the Image object.