This is only a very basic example, but I think it demonstrates the functionality you're looking for:

Add 2 Pictureboxes to a Form and Load a Picture into Picture1..
Code:
Private Sub Form_Load()
    Picture1.AutoRedraw = True
    Picture2.AutoRedraw = True
    Picture2.Visible = False
    Picture1.ScaleMode = vbPixels
    Picture2.ScaleMode = vbPixels
    Picture2.Move 0, 0, Picture1.Width, Picture2.Height
    Picture1.MousePointer = vbCrosshair
End Sub

Private Sub Command1_Click()
    Static bZoom As Boolean
    bZoom = Not bZoom
    If bZoom Then
        'Zoom in 10x on Top Left of Image
        With Picture1
            Picture2 = Picture1
            .PaintPicture .Picture, 0, 0, .ScaleWidth, .ScaleHeight, 0, 0, .ScaleWidth / 10, .ScaleHeight / 10
            Picture1 = .Image
        End With
    Else
        'Zoom Back out to 100%
        Picture1 = Picture2.Image
    End If
End Sub

Private Sub Picture1_MouseDown(Button As Integer, Shift As Integer, X As Single, Y As Single)
    If Button = vbLeftButton Then
        'Draw on Normal Sized Picture
        Picture2.PSet (X / 10, Y / 10)
        With Picture1
            'Recopy Zoomed Image to Give Illusion of Drawing on Zoomed Image.. 
            .PaintPicture Picture2.Image, 0, 0, .ScaleWidth, .ScaleHeight, 0, 0, .ScaleWidth / 10, .ScaleHeight / 10
        End With
    End If
End Sub

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Aaron Young
Analyst Programmer
[email protected]
[email protected]