The source documents are on Server 1?. It seems a little bit strange taking into account that the QDS is allocated on Server 2.
Take into consideration that when the document is reloaded, it's been executed by the QDS service, so in that scenario in Server 2. Have you checked that all the paths are available from Server 2 to Server 1?.
What version of Governance Dashboard are you using?.
I agree that generally you should keep the source folder with QDS. In this case I am doing some testing and I did not want to move all the documents and kept it on server 1.
I have checked all the paths in the QMC and they are UNC mapped to server 1 for QDS and QVS.
I am using v1.1 of ther Governance dashboard. When I run the task manually from QMC i get a document failed log file on Server 1 (in the governance folder) and task log file (in QDS folder) on server 2. So at least I know it is getting to the document.
It's kind of strange, the only thing that can fail on the Governance Dashboard are the paths... let me see if I can replicate your behaviour (I'm really interested in this).
If I find anything I will come back to you.
Have you tried to post a comment with your problem on the Governance Dashboard 1.1 SR1 thread?.