OTRS embedded images and Lotus Notes

Emails with embedded images sent to OTRS from Lotus Notes can reach OTRS rendered as text with the embbeded image placed in a separate attachment.

The problem in not on OTRS side, but rather in the Lotus Notes client and server configuration.

To fix the issue on the Lotus client make sure that the option "Format for messages addressed to internet addresses" is set to MIME.
Then on the sever apply the following settings:

In the Domino Admin open the "Configuration" tab
Choose "Server"
Choose "Configurations"
Choose the appropriate server
Choose tab titled "MIME"
Choose "Conversion Options"
Choose "Outbound"
 

Change the setting for "Message Content formatting" to the bottom option called "Create Multi-part alternative ...".

Email should now reach OTRS properly formatted with embedded image displayed inline.