Your web site may not have permission to view photos folder from C root directory. So copy the desired image to your website and use relative path(~) to display the image. i.e
<div>
<img id="image1" runat="server" alt="not avail." style="z-index: 100; left: 18px; position: absolute; top: 15px; height: 81px;" src="~/photos/a1.jpg"/>
</div>