HI -I've sent several screen shots. are you able to phone me? I apoligize for not sending the right ones. I'm going a bit crazy. I just put the whole file in dropbox and put the link if you have time to look at it.
Thank you for the example file.
But there is no opacity on your background picture!
As Uwe and I supposed.
The dazzling pink and violet colors of your RGB image are not possible in your CMYK colorspace.
The transparency switch to CMYK.
You can check this:
a) change the Transparency Blend Space to RBG --> no changes while changing the opacity of your rectangle.
or
b) activate your Overprint Preview --> no changes while changing the opacity of your rectangle.