yes, there wa s nice VI added in LV 7 that makes this very easy.
convert (parse) your serial read, so that the string is converted into a 2D array of integers. Then call these 3 VIs Draw Unflattened Pixmap >> Picture to Pixmap >> Write JPEG File
Before LV 7, I forget if there is a nice VI to help you (I don't have a pre LV 7 version of LV on this machine, so I can't check...)