Awesome! Great job Morkl, on this as well as on your homescreen mod! Some karma coming your way
I am no css expert, but I see nothing wrong with the small-caps definitions. So my guess would be that the reader lib itself can't actually handle small-caps in @font-face (which seems silly, but I have no better explanation).
By the way, how did you get it to log the css? I wanted to try that myself, but I didn't see what I could do with LogAdapter.debug right away.