OMG! I think I found a very simple fix, I'm going to try on 8 more books and then post my findings here!
It looks like all I needed to do was save the jpeg as a jpg and make sure both were in the exploded epub main folder and in the image folder.
Woooohoooo and its in my main library thanks to this thread
it looks like you must do the first step open and close in Sigil. this will change the file structure. I did notice the first book I tried converted back to no cover then I changed the view and it is visible in the second view but not the original. jeeesh looks like I'm going to work to get this fixed. after I do a few it should get easier however I know next time I will have to start from scratch again so will not be sideloading books or just accept the issue till this is fixed.
I also just downloaded the NookColor update but it did not help.