I tried the root of the project as well as an image folder underneath. Trongate gives a file not found error. Same thing when I try to access the url directly.
The sample projects work just fine and I am running xampp.
Is there any trick I may be missing?

G'day and welcome to Trongate

You should put your images or other files in the 'Public' folder you can also use the 'Assets' folder within the Module