> Is it possible to embed an image within a customized email template
 > without having to store/render the image from an external server?

You can use a data URI to embed the encoded image data in the <img>
tag.  It looks something like this:

<img width="16" height="16" alt="star"
src="data:image/gif;base64,R0lGODlhEAAQAMQAAORHHOVSKudfOulrSOp3WOyDZu6QdvCchPGolfO0o/XBs/fNwfjZ0frl3/zy7////wAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAACH5BAkAABAALAAAAAAQABAAAAVVICSOZGlCQAosJ6mu7fiyZeKqNKToQGDsM8hBADgUXoGAiqhSvp5QAnQKGIgUhwFUYLCVDFCrKUE1lBavAViFIDlTImbKC5Gm2hB0SlBCBMQiB0UjIQA7"
/>

De

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