As is often the case, I end up finding things out the hard way.
From the Amazon Kindle Forums, a post by their dtpadmin:
http://forums.digitaltextplatform.co...1&categoryID=3
To make sure an image uploaded to DTP (referenced from HTML) shows up in the largest possible size, use the following formatting options:
Images larger than 450 by 550 pixels are always re-sized by DTP
Images inside content (i.e. referenced by HTML) need to be 64kb or smaller, otherwise they may get re-sized during the conversion process.
Keep the image in an aspect ration of 9 to 11, which causes it to be re-sized to take up as much screen space as possible
The 'Preview' application does not convert images for display accurately. This means that it will show larger images to be rotated or re-sized even if they aren't going to be changed in the final Kindle content. This is a known issue with the Preview. As long as your images conform to the rules above, they will remain unchanged as Kindle Editions.
We'll see if that makes a difference.......
-bjc