Originally Posted by Jellby
"text-transform" and "display: inline-block" are not supported by the ePub spec, but maybe they are by the Kindle, and they probably are unrelated to your problem ("position" is also not in the list of supported CSS properties, but it's mentioned in several places in the spec).
Since it's all uppercase, text-transform is a no-op anyway.
One of the two drop cap styles uses block and the other uses inline-block, so that's also a non-issue.
The position property most certainly is in the EPUB spec. It says "Use of the CSS position property values to achieve absolute positioning (i.e. absolute and fixed) is strongly discouraged."
Note that position: static is the default, so this should always be a no-op. I inserted it just in case there was something screwy going on.