Well, that was a DOHH! moment for me. As soon as I woke the following day I realised what was happening with the renaming and pathing, and your reply confirms. I must have been wearing my stupid head that night.
Of course the images still don't display. Funny thing is that if I open the epub or sgf as an archive I can see the images are there and will display in a viewer if I extract them. They don't display in Calibre or on my reader either, though they did before I edited the base HTML in Open Office. I don't think its your program doing it though. There's something fundamental in the format of this file.