@Blevins_Mark For Elevation We generally use the LERC compressed tile cache while for 3 Band RGB we use the mixed format (jpg & Png). This allows for transparency along the edges. Additionally, I can't see a coordinate system in your images.
If you are using WGS84 Web Mercator then I would suggest just using the Manage Tile Cache tool and Pick Elevation Tiling Scheme for the DSM and ArcGIS Online Tiling Scheme for the Ortho. These then use LERC by default for Elevation and Mixed for the Ortho.