Rotating a raster causes it to disappear

Description

Rotating a raster that is projected on the fly causes the image to disappear.

Cause

This is a known issue that deals with a 'double transformation' applied to a raster. The first transformation occurs when the raster is projected on the fly because it is not in the same coordinate system as the data frame. The second transformation occurs when the raster is rotated. Currently, ArcGIS does not support the double transformation.

Workaround

1. Determine the projection of the dataframe. Go to View > Data Frame Properties > Coordinate System tab.
2. Use the project raster tool to project the raster into that coordinate system.
3. Remove the original raster from the map and add the new projected raster.
4. Adjust the rotation to the desired angle.