@Gazella20: You might try opening the epub file in Sigil. A quick way to fix the spacing issue is to find and open the epub's CSS file and add the following code on a new line at the end of the file:
Code:
body, div, p, h1, h2, h3, h4 { margin: 0; padding: 0; }
Save the epub, and exit Sigil. You can then re-convert the epub to mobi in calibre and transfer the mobi to your Kindle, hopefully without all the gaps between paragraphs.