is the path of the image correct if you check it in the image editor? is it relative or absolute? could you provide your files so i can have a look?

<edit> oh! jpg is no good since gamestudio doesn't support it for model textures i think but it shouldn't be the reason for the error.

as a quick workaround you could add a # in front of the line which calls copyfile() in the write() method of the c_exporter() class in export_gs_mdl7_static.py. you have to to manually copy the textures to the target folder then. </edit>