Thanks for your help Rajesh. Real knowledgeable resource in case others are looking for help with email scripting or webhooks. Here is the final code.
##check if the Preferred Name is populated and set
#if(${lead.Prefered_First_Name__c} != "")
#set($birthdayfirstname = "${lead.Prefered_First_Name__c}")
##If Preferred Name is blank check if the First Name is populated and set
#elseif(${lead.FirstName} != "")
#set($birthdayfirstname = "${lead.FirstName}")
##If Preferred name and First Name is blank set default
#else
#set($birthdayfirstname = "default")
#end
##print the image name
${birthdayfirstname}
***When working with email scripting makes sure to eliminate white space within your formatting.
Thanks Jason.
Rajesh