Why the Error Happens
The most common reason this error occurs is because the "Save Changes" button was clicked instead of the "Place This Image" button.
How to Remove the Error
If you attempt to place an image and get the "Image Not Found Error", follow these steps to remove the error, or replace it with your desired image:
Hover over and click on the "Image Not Found!" text
If you just want to remove the error, choose any image and continue to step 3; otherwise browse for the original image you were trying to place.
Click on the "Place This Image" button to place the image on your page
Now that the image is placed on your page, hover over it and click on it
Click the "Delete" button to remove the image from your page
The error and image should now be removed from your page.