I was going to say the you image was in CMYK...But you've checked that, right?
Keep the image dimensions to 600px by 860px or try instead of 100%, 95%.
Does the epub validate?
Can you upload it here so I can see what you've done:
This is what mine looks like:
Code:
<?xml version="1.0" encoding="utf-8"?>
<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.1//EN" "http://www.w3.org/TR/xhtml11/DTD/xhtml11.dtd">
<html xmlns="http://www.w3.org/1999/xhtml">
<head>
<title>Cover</title>
<link href="template.css" rel="stylesheet" type="text/css" />
</head>
<body>
<div id="cover">
<div class="image">
<img src="images/Cover.jpg" alt="Cover.jpg" height="95%" /> </div>
</div>
</body>
</html>
Inside the metadata:
<meta name="cover" content="my-cover-image"/>
Inside the manifest:
<item id="my-cover-image" href="images/Cover_kindle.jpg" media-type="image/jpeg"/>
Inside the spine:
<itemref idref="cover" linear="no"/>
Inside the guide:
<reference type="cover" title="my-cover-image" href="images/Cover_kindle.jpg"/>