Wow, I solved my own problem! Maybe I should buy a lottery ticket.
I tried to think of what changes have taken place recently that might have caused the Red "x"'s. Then I thought of the following. I use Firefox for my browser. Never use Internet Explorer. Except for just recently, I did startup Internet Explorer to do something. Can't remember exactly why. Just on the oft chance that was connected to my problem, I reset Internet Explorer.
Tools>Internet Options>Advanced Tab>Reset.
Voila! No more red x's and all images within my email appeared.
I never realized the connection between Internet Explorer and Windows Live Mail. But I must have done something that changed a setting and caused the images to be blocked.
One word of caution. Resetting Internet Explorer can cause you to lose a lot of settings, so I would suggest you read the following information to know what will happen. Reset Internet Explorer 7 settings
So now with my email images appearing I see my GM dealer is offering a $15.95 oil change. Guess I'll give them a call.