Have you tried creating a 1:1 or Standard preview (Library > Previews > Create Standard / 1:1 Preview)?
It might be that for some reason LR is showing you the embedded JPG...
I would venture a guess that its something with the previews file.
Try the following:
Create a new blank catalog and catalog just a few of your files. If that works then the previews are corrupted somehow. Rebuild previews for your current catalog or continue with new catalog and import the assets (not the previews) from the old one.
To rebuild your previews, close the catalog, move the Previews.lrdata file from it current folder. Open the catalog again and previews will be regenerated. It may take a while depending on how many assets you have.