StackPanel (or DockPanel) is required, but the key is to "place the image within a Border with it's ClipToBounds property set to True."
<StackPanel>
<Label>Testing</Label>
<Border ClipToBounds="True">
<Image Name="TheImage">
<Image.RenderTransform>
<ScaleTransform x:Name="scale" ScaleX="2" ScaleY="2"
CenterX="10" CenterY="10" />
</Image.RenderTransform>
</Image>
</Border>
</StackPanel>