Thank you both for your help on this. I guess we'll just have to carry on as best we can until a reliable mobi editor comes along.
Here's one little thing I tried. I wrote a ten chapter piece in OpenOffice ODT. I converted it to epub via Calibre, This added all the chapters for me and then I tweaked it in Sigil. I found this a lot easier than writing directly in Sigil. Once tweaked I converted to mobi with Calibre. The image alignment is still a problem, but seemed to work better when I hard coded the XHTML.
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