Thanks for sharing your script! I hope you don't mind but I made some changes to it so that rather than creating a cover with the author and title it uses an existing image file. It resizes and desaturates the image then places the 4 different images in the .kobo/images directory. I know next to nothing about bash scripting so having yours to work from really helped. I'm posting it in case anyone else wants to use it or if anyone has any suggestions for improvement (I'm sure there are plenty).
The script is here (note that I took out the ^M characters so it would run on my mac. Not sure if that makes it unable to run on windows):
http://pastebin.com/n6acJQjH