Thank you Dale for boldly going...
I'm using InDesignCS 3 (too old to have EPUB capability) to convert photoshop and sometimes JPG files into PDF. From there, I convert the PDF to Mobi (from there, I convert the Mobi to EPUB using Calibre). There are bleeds in the InDesign Layout, but I thought those would be cut off in the PDF output (there are red bleed lines in InDesign--I always assumed they cut off the image outside).
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