Mobile network operators are considering caching as one of the strategies to keep up with the increasing demand for high-definition wireless video streaming. By prefetching popular content into memory at wireless access points or end user devices, requests can be served locally, relieving strain on expensive backhaul. In addition, using network coding allows the simultaneous serving of distinct cache misses via common coded multicast transmissions, resulting in significantly larger load reductions compared to those achieved with conventional delivery schemes. However, prior work does not exploit the properties of video and simply treats content as fixed-size files that users would like to fully download. Our work is motivated by the fact that video can be coded in a scalable fashion and that the decoded video quality depends on the number of layers a user is able to receive. Using a Gaussian source model, caching and coded delivery methods are designed to minimize the squared error distortion at end user devices. Our work is general enough to consider heterogeneous cache sizes and video popularity distributions.