A lot of Gutenberg files are not particularly friendly toward automatic conversion, as they use floating divs and other advanced epub features (in many cases of dubious value for a given ebook). This one is apparently formatted to expect an ultra-wide landscape view that doesn't exist in any e-readers I'm aware of - the aspect ratio issue with the images improves the wider you get. At a guess, Calibre is probably trying to make it fit your e-reader's screen based on your output profile.
You're best bet is to insert the cover using Sigil instead. That said, I think this epub may still not look great on an ereader.
Last edited by ldolse; 11-29-2010 at 05:10 PM.