If the RadCaptcha is used in Web Farm or Web Garden environment, then you should use the Session to store the CaptchaImage. Usually, each of the servers or the worker processes, has independent Cache (i.e. not shared among the other servers/processes), and the image will be missing on the control.
So, store the CaptchaImage in the Session, and make sure the host environment uses out of process Session state.
the Telerik team