That may have to be the trade off for at least rescuing the text.
If there are no images in the Text Edit application, it is not because it can't show images. It must be down to a corruption of the file.
If there are images in the Text Edit application, they can be individually copied and pasted back into the Works document.
If there are links where the images should be then you may be able to go to the web and get those again.
To make sure you don't lose any work again you should take incremental backups of the document.
If you want to make a 'master' type document, that will be stable and work on any computer, regardless of software package used, then save the document as a PDF.
You can do that easily in OS X using the Print - PDF - Save As PDF option.
Here is a helpful YouTube video showing that process:http://www.youtube.com/watch?v=svvQapb5Bb8
Let me know if you have any questions at all, I will be happy to help :)