Try this,
1) Edit your includes/entry-functions.php file, search around line 395 for this code:
$entry_details[$i]['value'] = '<img src="'.$options['machform_path'].'images/icons/attach.gif" align="absmiddle" /> <a class="entry_link" href="http'.$ssl_suffix.'://'.$_SERVER['HTTP_HOST'].dirname($_SERVER['PHP_SELF']).'/download.php?q='.$q_string.'">'.$filename_value.'</a>';
replace it with this one:
$entry_details[$i]['value'] ='<img src="http'.$ssl_suffix.'://'. $_SERVER['HTTP_HOST'] .dirname($_SERVER['PHP_SELF']) . '/data/form_' . $form_id . '/files/element_' . $element_id . '-'. $file_1 . '" /> ';
2) Edit includes/helper-functions.php file, search around line 349 for this code:
$data['value'] = strip_tags($data['value'],'<a>');
replace it with this one:
$data['value'] = strip_tags($data['value'],'<a><img>');
That would show the image into your email.
MachForm Founder