Symptoms:
An Outlook client receives an Operation failed error message in Outlook when the following conditions are true:
- The client is Outlook 2013 in online mode
- The client composes an HTML message with inline JPG images
- The client saves the message in progress to the drafts folder
- The client opens the message from the drafts folder and attempts to send or edit/change the message.

To reproduce error:

- Start new message in outlook 2013
- Insert JPG
- Save message as draft
- Open Draft and attempt to send

Ran in outlook in safe mode problem persists. Problem exists on all computers tested.

I've tried to research the issue and only find workarounds. Has anyone seen an actual fix for this?

Found

https://support.microsoft.com/en-us/kb/2763886?wa=wsignin1.0