On Sat Oct 14 2017 Eli Zaretskii wrote:
> Works for me in Emacs 26.0.90 on MS-Windows.  I used PBM images from
> etc/images/ in the Emacs tree: does this fail to work for you with
> those images as well?

I need to apologize: the bug is not with pbm images, but with ppm
images.  (The tool I use to create them calls them pbm, but it gives
ppm, pgm or pbm files depending on the content of the image.)

Then I realized there seem to be different versions of ppm files.
If I use the imagemagick tool `convert' to convert
etc/images/home.pbm to a ppm file it gives me the attached file
home-1bit.ppm.  This one still displays fine.  But if I export this
file with gimp, it gives me the attached file home-8bit.ppm.  This
file illustrates the bug I am talking about.

The file names refer to the output from the imagemagick tool
`identify':

$ identify home*
home-1bit.ppm PPM 24x24 24x24+0+0 1-bit sRGB 1.84KB 0.000u 0:00.000
home-8bit.ppm PPM 24x24 24x24+0+0 8-bit sRGB 1.78KB 0.000u 0:00.000

PS: Visiting these files display them fine (according to the
modeline, this uses imagemagick).  The problem occurs with
insert-image which appears to process these files differently