Help with taxonomy menu view to display in a block placed in a region

Help most appreciated. I am fairly new to Drupal, the more I use it the more excited I get.

I am building a website for a home ware importer, the importer having a number of departments. The departments are categorized using Taxonomy with Departments as the vocabulary and the individual departments as terms. I am using Taxonomy Menu to create the Departments menu.

There are two content types that are linked to taxonomy, Department Image and Department Item. There is only one Department image per department and many Department items per department. In terms of layout the department image appears at the top of the page with the items appearing below that in a grid of 4 per row, 8 per page. For the department image I have created a region on page-department.tpl.php and am attempting to create a view to display the department image in a block placed in that region.

I am using Pathauto to generate aliases.

I am able to get the grid of department items to work via the default taxonomy_term view using taxonomy/term/% as the page path, using taxonomy term id as arguments and filtering on node type of department item.

I am having problems getting the department image view to work. I have tried creating a block display in the default view as well as creating a new view for the department image node type. I have attached a screen shot of this view, as can be seen the view produces a result from within the views ide however on the page nothing is shown – I also attach this screen grab. If I remove the block view argument the view works however all department images are shown.

Help, advice greatly appreciated.
Regards
Patrick