My solution has been to enter the original size (in pixels) of the image file right into the img link. Example:
<img height="25" width="48" src="../Images/imagetitle.jpg" />
that way Kindle knows to respect the size and how to display the image.
[edit: on rereading, it seems your problem has to do with images being reduced, where mine has tended to be images being enlarged. Either way, you might try this and see if it helps at all]