Yes, @jgaiser, I have also come to the same conclusion -- that the kindle firmware itself dictates that the new format have larger line spacing. My theory is that they wanted to make the small, medium and large line spacing options more usable. In the old format, most people just used the "large" option because the small and medium were too squashed together.
A@JSWOLF, thanks! I'll try these fonts out.
In the meantime, I have opted to choose AZW3 despite the above-mentioned issues. I am going to have to learn to live with dropcaps with large spaces beneath them, and with switching to "medium" line spacing every time I open an AZW3 book.