[Danger]

My first thought would have been to send the book to your Kobo via ADE and see what it looks like. Then you eliminate your Kobo (if it shows you italicized words) and narrow it down to some setting/plugin in Calibre, if you Kobo doesn't show you words that should be italics then you know it's the Kobo and not Calibre.

As a side note, I've seen a lot of the books I've modified use either <em> or a <span class="[classname]"> instead of the simple <i> tag. While the first 2 (should) achieve the same result Kobo at one point was having troubles with the <em> tags and rendering them as bold instead of italics. There is a time and place for the <em> tag but we don't need to go into that here.