It seems like someone has modified the files. In reality, they should only change the grid_usermods.cfg.cmd file. If they added 'set SASLOGCONFIGFILE="%SASGRIDCMDPATH%\logconfig.xml"' then they probably modified the sasgrid.cmd file also and/or deleted the logconfig.batch.xml and logconfig.connect.xml files in the GridServer directory.
Since logconfig.xml is not a config file that SAS ships, I am guessing that it does not create the job logs like the logconfig.batch.xml file does which is why you are not seeing the log output.
You would probably need to find out the reason those files were modified the way they were. By fixing your problem, you may reintroduce a problem the previous changes were meant to fix.
You may want to talk to tech support to have them help sort out this problem.