@cjneper wrote
Assuming your image has units of inches......and that's a big, actually huuuge, assumption (it might be neither feet nor inches, it might be meters).
<<...The "Units for insertion point & density" should be read from the world file to be "inches"...>>
No, it cannot be inches. Why? Because the coordinate system you've assigned to modelspace is FEET and the units in your drawing space will always adopt (or inherit) the units used in the assigned coordinate system. BTW, if you don't assign a CS then you can't expect your image to insert correctly using geospatial coordinates. Assigning a CS is mandatory to achieve geospatial accuracy.
<<... the world file it is defaulting to feet thus is not inserted correctly....>>
It's not defaulting to feet, it's actually using the feet from your assigned coordinate system. MAPIINSERT requires the native units in the image to be honored, not overridden by an AutoCAD user. (This is assuming the image's author gave it inch units to be begin with.)
To fix your issue you need to tell Map3D the image has units 'other than' feet (in your case inches) so perform a conversion when you insert it. Once it's informed the image has different units, he will convert from the native units to feet (or the units in the assigned CS).

For a definitive answer, complete with instructions, you can upload the image to the Forum? Alternatively, you may send the image to me directly.
Chicagolooper
