I think it might actually be changes to Kindlegen that have broken the cover functionality. I don't think the EmbeddedCover meta-tag is valid any more.
The following quick mods (attached patch) to the mobi_opf.py file seems to get the cover functionality going again for unpacked MOBI6/7 files fed right back to the latest versions of Kindlegen ... but it's only intended as proof of concept, and could very well break something else.
Basically, instead of the EmbeddedCover meta tag pointing directly to the cover image file, it (Kindlegen) is expecting the format of:
<meta name="cover" content="cover_img" />
and then the standard matching, manifested image file in the spine:
<item id="cover_img" media-type="image/jpeg" href="images/image00001.jpeg" />
That might actually simplify
some of the MOBI/KF8 logic in the mobi_opf.py file, I should think.