In Calibre, you want to set the output profile to tablet so the images do not get touched. Maybe Calibre is stuck processing the images. In one of the later version 2.8 versions, I did have an issue with one image being processed. The later version 3 Calibre that didn't happen with the same image (I tried it during the beta so I could report it).
So stop the conversion, check the output profile and if it's not tablet, set it to tablet and try again but this time forget Mobi and use KF8. Your Fire can read KF8 so that's what you should be using.
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