If I use LoadTerrain(HeightMap) I get "failure to load heigtmap" error.
You do also realize that you can overload built-in functions with your own right?So, for your example above (passing LoadTerrain() an image handle), you can write your own LoadTerrain function (as Ross suggested) that deals with an internal image as opposed to an external one such as you wish.
Of course if you do this, you won't be able to use the original LoadTerrain function any longer...