Tonight I used the "Kindle Kid's Book Creator" to turn my book into something that the Kindle Store could upload. the mobi file I'd created earlier and opened fine on my kindle wouldn't load into the kindle store so I went ahead and downloaded their Creator and that seemed to do the trick. There doesn't seem to be any way to add audio with the Kindle Kids Book Creator but C'est la vie. Its up in the Kindle store now, though it won't be available until Jan-
http://www.amazon.com/dp/B00RDQF8JW
ETA: Also had a heart to heart with the publisher today and we re-negotiated our relationship. Basically they admitted that they weren't doing crap and I said okay fine, but I want more money and they said "Done."