I just set up a small library with a couple of Seasons from a Series on one of my client machines. I added the Seasons folder and copied the Series art to the Series folder and the two Season arts to the Seasons folder. I needed to set up the Theater View settings but once done, it worked perfectly. I didn't need to restart client or server.
The only thing we haven't checked is your Theater View settings. I suggest setting this up from scratch for TV Shows.
Go to Tools > Options > Theater View.
Next to Items to show, click Add and select Root Library Item
Change the Name to TV Shows
Click "Set rules for file display" and, under rules, select "Media Sub Type" in the first box, "is" in the second box and "TV Show" in the third box. So the rule is Media Sub Type is TV Show. Click "Apply" and "OK".
Select Library Item 1 and change the name to Series.
Below the name to the right click Add, Type is "Library Field" and select "Series" and OK.
Again, click Add, Type is "Library Field" and select "Season" and OK.
Again, click Add, Type is "Expression", change the name to Program and type TVInfo(SeriesDisplay) and OK
In the box, you should now have Series, Season then Program. If they aren't in that order, drag them to the correct order.
Select Library Item 2 and click Remove. Repeat for Library Item 3.
Click OK.
If you now go to Theater View and go to the top menu, you should see your new TV Shows category.
Select this and select Seinfeld and, hopefully, you will see your Season 1 art.
If this didn't work, I really am stumped!!
Nick.