Can you explain this better and include all the code? Your code does not do anything with the stream so the code does not make any sense. You load the image from a file, then save it to a stream and free then stream, so the code does not do anything except load the file.
Sorry but without seeing all the code I can not be of much help. Generally however I use a TMemoryStream, not TStream, but in your case I am not sure if it will help.
Are you setting the fs.position before trying to access the fs?