It is the rendering machine of Calibre that is responsible for the loss of quality.
For instance, if you import a cover.jpg in a 100 percent quality, Calibre compresses it to a 80 percent quality while converting. (See your example with 22.7 KB versus 19 KB.)
The quality of the compression is much worse than done with a graphic programme, but if you reduce the quality of the jpg to 80 percent before importing, Calibre will compress it to about 65 percent. You can't avoid this and your cover.jpg with the plain background will get distortions anyway because the format is jpg. I wonder that the red letters of the title are ok. I had a red title once and I had to replace it by a blue one. JPG doesn't like red.
But now that I have written this, I check your post again and I read that the original formatting was done by a Paul Salvette of BB Edit and you only use Calibre to control the result. So perhaps this is an issue of Calibre only and not of the original epub, which may be ok? Can't you control the ebook on a tablet device instead of getting confused by Calibre?
Edit: If you simply want to have a look on your epub, you can use the Calibre viewer without importing your book into Calibre. It is "ebook-viewer.exe" in the Calibre programme folder. But note: As far as I have learned here the viewer shows it only in epub format. The mobi/prc format is converted to epub. So you don't have the original mobi file in the viewer. You can adjust the width of the viewer to the width of the cover, so there is no distortion.
Last edited by GMcG; 09-15-2012 at 05:59 AM.