In old Kindle devices you have to use pixels and not percentages in images. But even so, is very few what you can do with images in those devices. I doubt you can get what you want in Kindle 1 and Kindle DX by using only one image and pure css. The only thing I can think right now (and could work for .mobi), is that you should use a whole image for the ornaments and the text "Chapter 2". And also you should use media queries in order to not to alter the code for the .kf8 format (that is, you should write some code only visible for .kf8 and some code only visible for .mobi). It's not difficult but either very easy if you don't understand what I writing
And regarding small-caps, you have to use "fake" small-caps in older Kindle devices. Do a search in this forum about that subject and you'll find a lot of info. Read the
Kindle Publishing Guidelines regarding media-queries and the supported html tags and css styles for new and old Kindles.