[1] First, you've the input in the kind of (generically binary - blob, which you know from the way it is generated be in fact sort of character steam in disguise) stream in place. Hence, I would say
you should not take the detour through jaxp dom api's... you can feed directly to jdom2 via its SAXBuilder (see below). (Furthermore, I think you should use jdom2 rather than jdom, no reason to still using the latter, that the fully qualified name seems to suggest). Besides being more concise, with one level of complication taken out, it would even be easier to debug.
[2] Then when you feed the stream to the builder, you use a Reader to take into consideration of the fact that it is in fact a character stream... With a reader, you can feed the supplementary info you retain concerning the character encoding... If things match up, the behaviour of the output would be more comprehensible.
[2.1] As a side note, you should be careful not to be misled by System.out to the console because that part of the display is further influenced by the system encoding... If you can log or save to a file or display through something swing can offer (such as JTextPanel...), conclusions drawn may be more solid.
Hence, try something in sketch like this.
