I found the answer in the knowledge base
SPR #: 951769
Summary: SOLIDWORKS PDM -API, Help – Documentation: Help for IEdmCmdMgr5::AddToolbarImage should indicate that this API does not work with Windows Vista and later
Also I found that there is no way of drawing the button using IEdmAddInDrawButton5.DrawToolbarButton
SPR #: 733185
Summary: Add-ins that implement IEdmAddInDrawButton5::DrawToolbarButton do not create dynamic toolbar buttons
So apparently, correct me if Im wrong, there is no way of adding an icon to your menu commands.
This has not been solved since windows Vista!