I use
![Distribution](/Users/michaelwiseman/Desktop/Test Website/my_website/content/distribution.png)
to access the image. The Rmd panel displays the image immediately after the command. But the viewer shows only the name "Distribution".
Removing the "output: html" in YAML has no effect.
Using absolute path in Markdown will translate also to absolute in HTML, and if you website is not served, you won't be able to see the preview. Usually for website, you should use relative path as anyway you'll need to upload all the images when deploying your website.
Is the website working when opening in a browser outside of rstudio ?
As reference know that knitr::include_graphics could help insert an image in a Rmd document.