Does the processing and recompression cause any noticeable lack of fidelity, do you think? Working from a jpeg original, then converting to tiff and back again sounds like it might be problematic...
I seriously doubt that it causes _noticeable_ lack of fidelity. I think it should work with only one conversion step in any case, as the TIF contains jpg tiles. In theory it should even work without any conversions as it should be possible to tile the raw jpg block data. I googled a bit and it looks like nobody has done this before. Such a tiler has the potential to be both faster and more memory efficient.
But, recompression is not such a bad thing. Especially if you look at the compression ratios some people upload on commons. Photoshop should have a dialog box popping up when ever someone selects jpg quality level 10 (or 100%): "Seriously? Do you think this picture is really woth all those bytes?! I don't think so" And then it should automatically move the slider back to 90% ;-) I'm not talking about restorations here, just about regular photos, where you cannot see the difference IMO.