Hello Paul,
I was not able to reproduce the issue with the inserting large image into the diagram. I have tested this issue in the Diagram Builder sample by inserting a large image into the diagram while the Diagram.Model.BoundaryConstraintsEnabled is set to FALSE. And the image can be inserted without any problem. I have also attached the image file that shows the output of the sample along with this.
Are you finding the problem while setting false value to the Diagram.Model.BoundaryConstraintsEnabled property. If so please post us some reproducing steps on this. Also if possible could you please send the image file that you have used for testing? So that it will be easier for us to have a closer look into the problem and to resolve it.
Kindly let us know if you have any other questions regarding this issue. We will be glad to assist you.
Thanks,
Meera.
ResultImages.zip