Sorry, I can't test the Palm version, but MobiReader for PC is correctly displaying the very same code (mine) above after using calibre v0.9.0 to convert to MOBI, as well. So I'm a bit baffled. Are you absolutely certain the stylesheet is being linked to that particular html file in the original ePub?
“Politics: A strife of interests masquerading as a contest of principles. The conduct of public affairs for private advantage.”