The content area is an editable iframe and to show the images they must have valid paths and read ASPNET / NETWORK SERVICE permissions. You can find more information in this article: Example: Enforcing Roles
You can test the permissions using the code provided in the An error like "... because the application did not have enough permissions..." occurs only in a production environment. How to debug the issue?
section of the following article: Troubleshooting
the Telerik team
If you want to get updates on new releases, tips and tricks and sneak peeks at our product labs directly from the developers working on the RadControls for ASP.NET AJAX, subscribe to their blog feed