Tried Calibre last night (still haven't fixed mod_rewrite, though). Looks like some of the commands used in the html2epub shell script requires admin access and we're only given user rights. I even changed permissions to 777 and still no go. Created a test.sh and that worked just fine with shell_exec(). I'll probably try the ZipCreate method tonight or at least attempt to create a wrapper for the whole epub creation process.
Thanks again for all the help!