I can tell you straight up that short of moving your quotes into tables, you will never get them to indent on the right-hand side. Mobi just doesn't do right-hand margins.
Depending on what you're using to indent, you can probably fix the left-hand side, but you'll have to explicitly set the indent for both levels.
You will basically have to tweak your XHTML & CSS by hand to more-or-less match up with what's capable for the Mobi format, which is basically a glorified HTML 3.2. The old
Mobipocket Developer Center documentation will probably be useful, along with the
Amazon Kindle Developer Guidelines (less useful).
Frankly, I advise you to lower your standards to a simple functional display. Anything else is just asking for frustration when dealing with the Mobi format's limitations. (And KindleGen's bugginess, but that's a different matter.)
Also, don't use multiple or descendant selectors in your CSS if converting via KindleGen. These are just two of the things which Do Not Work.
Hope this helps.