Well, I don't see anything enabled that could be causing a problem. Without knowing how the indents are defined in the lrf it's difficult to know if there is a specfic fix. There is a 'fix indents' option under heuristics that can repair them if they were defined a certain way, but I don't think the normal lrf conversion would have hurt that.
You could open a bug with the book if you want, as it sounds like there may be some problem with the conversion and how these books are defined, but there is a potential fix using extra css.
Add this line to the extra css box under 'Look and Feel':
Code:
p {margin-top:0.3em; margin-bottom:0.3em; text-indent:3%; text-align:justify}
That 'should' indent every single paragraph, not sure if every one was indented before. You can also tweak the top and bottom margins as you see fit - I prefer a very small amount of space, hence .3em.