bit of a necro post, but I find this works well for ADE-kindle on 100% text:
.drop {
overflow: hidden;
line-height: 89%;
height: 0.75em;
font-size: 281%;
margin-right: 0.075em;
float:left;
}
example/images on this blog post:
http://stunjelly.com/e-books-drop-caps/
The overflow hidden gets rid of the need for the negative margins that kindle gets so upset by