"visibility: hidden" is not supported in the current ePUB spec, it also means that the element takes its natural space (that's why you use font-size: 1%).
It's better to use "display: none", wich completely remove the element from the page.
But anyway, there's no reason why you can't have an image in an <h2>:
Code:
<h2 title="chapter1"><img src="..." alt="..." /></h2>
and style the <h2> to behave like an ordinary <p> or <div> in margins, alignment, etc.
Hmm... The above is to have Sigil automatically generate a TOC. But you don't need Sigil for that, you can just edit the NCX file and add all the links you want.