Have you tried printing the book to a "PDF writer" to create a PDF version of your book?
There are several free PDF writers including PrimoPDF and PDF Creator. Install one and select it as the "default printer" for Windows, and then in PAF print to it (remove the checkmark beside "Print to file" firstly, to prevent the output from going to PAF's built-in RTF writer). This normally solves the problem of missing photos and missing Index. If it worked, change the "default printer" to your normal printer.
If the photos are still missing from the PDF version, check in PAF whether they are shown as the default photos for the people concerned.