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Update:
When I point the raster search path to the MapGuide sample raster folder it works.
(C:\Program Files\Autodesk\MapGuideServer6.5\Projects\Sample_World\Raster) The image in that folder is a jpg. Are SIDs no longer recognized?
I added a test SID to my raster folder to determine if there was an error with my original images, but it also did not show up in the raster list in MapGuide.
Do I need to convert my SIDs to jpgs?