You probably have bad sectors on the Diskette....probably physically defective. Very tough if not impossible to recover a JPG is this situation.
I would copy the file from the diskette to your hard drive and use one of these utilitys. If you can't copy try running against the diskette directly.
http://www.webattack.com/get/jpgfixer.html
http://www.claymania.com/zefrjpg.html
It could also be possible that the source diskette drive can read but not others. I 've seen this happen but not recently.