From http://gissc.services.officelive.com/imageblender.aspx it states: "Use the right output path depends on whether this project is on a machine with ArcGIS Server or not" and "This utility does not require ArcGIS server" It seems the above is incorrect. Hopefully, this will be corrected on the website to help avoid people wasting some time trying to get it to work on a server that does not have ArcGIS server installed.
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