On 2013–08–04 Michael Ash wrote:

> But env_letter.tex calls two pdf files with \externalfigure (see
> below).  These two pdf files are also in the directory pointed to by
> TEXMFHOME but they show up in the finished document as gray "state:
> unknown" boxes

This works here.

  \setupexternalfigure [location=default]
  \starttext
    %% \externalfigure [cow]
    \externalfigure [somefigure]
  \stoptext

The graphic somefigure is located in TEXMFHOME. You probably did not
set location to default.

  http://wiki.contextgarden.net/Command/setupexternalfigures

> % Define logo for the first page header
> \defineletterelement[layer][head][example]{%
>   \framed[background=logohead,frame=off,align=left]{%
>     \externalfigure[UMA_Seal_200_Maroon.pdf][height=3.1cm]}
> }
> 
> \setupletter[ signature={\externalfigure[signature-blue.pdf]} ]

If you provide code, please create working examples, not just
snippets.

Marco