Don't use CachingEnabled and CacheValidity when you work with local images (which are stored on the device), it has zero impact.
The loading.png image doesn't exist in the app, so it will not be shown.
The DownsampleToViewSize property will downscale the image to the container size in memory instead of loading the full image and letting the GPU scale it at runtime. (We don't recommend using it as it can decrease the quality of the image.)