You're working too hard...try
the following from Ronen Magid on www.codeguru.com

1. Create your own CBitmap-derived class (say, CMyBitmap)
2. Add a "load from bitmap" method as listed below

BOOL CMyBitmap::LoadBitmap(LPCTSTR szFilename)
{
  ASSERT(szFilename);
  DeleteObject();

  HBITMAP hBitmap = NULL;
  hBitmap = (HBITMAP)LoadImage(NULL, szFilename, IMAGE_BITMAP, 0, 0,
             LR_LOADFROMFILE | LR_CREATEDIBSECTION | LR_DEFAULTSIZE);
  return Attach(hBitmap);
}

Then do a CStatic::SetBitmap ( hBitmap ).

I noticed that your example code is all done in C, not C++. The above code assumes using MFC and C++. The LoadImage () call is a WinAPI C-function call that returns an HBITMAP handle.