Never mind, the inserted space 'bug', it isn't one after all.
I was using the calibre viewer's 'inspect' to look at the underlying html, which shows as
<img src="Images/ 00004.jpg" ........>
Notice the space, which I thought was an error, but looking at the 'real' html, either viewed from exploded epub or from Sigil, the html is correct and there is no space in the filename.
Once the Images were put in the txtz, and in sub-folder if needed, then they do show properly.
