How can I embed an image in an Apple Mail signature?

I use Apple Mail daily, and up until recently I could have images inside my mail by referencing an external source. However the external source has since become unavailable, so ideally I would like to embed the images into my mail signatures. I am pretty good with creating the signature in HTML and create the webarchive for it, however have no idea where to begin as far as embedding the images are concerned. Has anyone actually done this, or know of a very good resource that I can use to figure it out?