First off, I want to mention that your code would've been easier to read and analyze with the forum's tags instead of what you used.
Anyway, one glaring problem that I see is that you're using the ArcGIS JS API version 1.6. This may be a deliberate choice of yours, but there is a much newer and better version out (v2.1). If you have mistakingly been using 1.6, then change <script type="text/javascript" src="http://serverapi.arcgisonline.com/jsapi/arcgis/?v=1.6"></script>
to <script type="text/javascript" src="http://serverapi.arcgisonline.com/jsapi/arcgis/?v=2.1"></script>
and also change the external CSS from <link rel="stylesheet" type="text/css" href="http://serverapi.arcgisonline.com/jsapi/arcgis/1.6/js/dojo/dijit/themes/tundra/tundra.css">
to
<link rel="stylesheet" type="text/css" href="http://serverapi.arcgisonline.com/jsapi/arcgis/2.1/js/dojo/dijit/themes/claro/claro.css">
Other than that, I don't see why it shouldn't work. You should definitely look into ciava.at's suggestion, as I also think your use of custom imageParameters (set to JPEG) is why it's not rendering.
Good luck!