I seem to be having an issue with linked images in files. Even if these files are packaged and saved in the exact same place, illustrator is unable to find them. I often get another error that reads: "Could not find plug-in to read linked file "Xxxxxx" Choose replace to selecter another"
I don't know if I have removed an important plugin by accident when clearing the cache? or if there is some other reason for these messages?
Thanks for reaching out. I hope the issue is resolved with the Mylenium suggestion to convert the JPG to Tiff format. If not, would you mind sharing the JPG file via DM and confirming the OS & Illustrator version?
Kindly update the discussion if you still need assistance with it. We'd be happy to help.