Melanie,
Yes, the image service did start and I can view it in ArcMap after adding it via REST. When I stop the service, the Image, Catalog, Download... tabs are still greyed out in Manager. Under the Capability tab, Catalog and Download are not checked and I'm not able to check them.
If I add the Referenced Mosaic directly to ArcMap from SDE, I can see the footprints and open the attribute table. None of those are options for the Image Service (via Layer Properties or right click).
Is there something special that needs to be done when creating the raster catalog and referenced mosiac to get it to work? I've been successful using a file gdb, but not through SDE.
Thanks.