Dissapearing image

This code works (i think)
basically what happens is that when the mouse is movd over the picture box the image disappears.
i can't figure out why though.

Private Sub picBoard_MouseMove(ByVal sender As Object, ByVal e As System.Windows.Forms.MouseEventArgs) Handles picImage.MouseMove
If isDragging Then
Dim gr As Graphics = picImage.CreateGraphics
' gr.Clear(picImage.BackColor)

Dim rect As New Rectangle(startX, startY, e.X - startX, e.Y - startY)
Dim X1 as integer = (e.X – startX)
Dim Y1 as integer = (e.Y – startY)

gr.DrawRectangle(Pens.Red, rect)
gr.FillRectangle(Brushes.Transparent, rect)
End If
Dim bmpCropped As New Bitmap(X1, Y1)

Dim grBitmap As Graphics = Graphics.FromImage(bmpCropped)

grBitmap.DrawImage(picImage.Image, 0, 0, rect, _
GraphicsUnit.Pixel)
picImage.Image = bmpCropped
picImage.SizeMode = PictureBoxSizeMode.Normal
gr.Dispose()

End Sub