How do you use the featured image of the most recent post in a category as the background image

$image_src doesn’t exist yet when the “Header_Upper_Left” div appears. So, you’d need to place the code for deriving whichever image you want to have used before you actually use $image_src.

There are a couple of ways to do this. One way that a lot of themes do it –
like ones that have a top “Featured Post” or “Posts” format, is to start the query, get only the most recent post (and its data, attachments, whtaever), then rewind the query if you’re using it as main loop and displaying the same post again.

The alternative would be just to separate the special div from the main query, and use a separate query or a wrapper like get_posts() or wp_get_recent_posts(), to get the post ID, and then use the post ID to get the attachment ID.