Hi Cherry,
Thank you for the quick reply.
1. Yes I was trying to add the Silverlight application using the Silverlight WebPart itself and followed the steps. When I provided the XAP file url from blob storage it always failed. It only works when the XAP is uploaded to the document library and the document library asset url is used.
2. I do not have SharePoint on premise, but the Application is hosted on an ASP.NET MVC Website on Azure and it works fine.
3. Blocked file list doesn't contain the ones I see blocked. I am unable to see png, jpg or jpeg files in the application. Please note that these files are not embedded in the XAP file and will be accessed from Blob Storage on Azure.
Thank you
nc