We are sorry to hear that you have such issue.
GroupDocs.Viewer of course can display JPEG files but the same can do every browser, so using GroupDocs.Viewer for displaying JPEGs is overkill. Now what about your list:
1. Folder “Processing” stores intermediate results of the converting process, it should always be local. In fact, it is required by GroupDocs.Viewer as a place for internal work. Folder “Cache” can be remote; when conversion is completed, files are copied from “Processing” to “Cache”. So, regarding to your question, it is “Cache”.
2. It is not clear what you want to do. Do you want to store cached files in the SQL Server and then insert them to the GroupDocs.Viewer’s cache? If yes, the purpose of such operation is not understandable - the only “advantage” of such operation will be performance degradation.
3. We need the source code of the page and the way how you load the file in order to reproduce it.
4. Maybe the document is the reason of such issue, maybe it is corrupted or not supported by the GroupDocs.Viewer. We need the source code of the page and a “problematic” document.
If you will have more questions please feel free to contact us.