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Nerys, I have not read the whole of this post so I'm sorry if this has been suggested or you have tried it already.
But have you used BookCreator 3.0 to setup you formating? It is a template for Microsoft Word and it can also output to many different formats, including LRF and EPUB. I use it to get the formating right for my Sony PRS as some books have lines between paragraphs which i hate and they also have to big an indent for paragraphs so I get the book into RTF format and then import it into the BookCreator template and sort out the format. You can also put page breaks in so the chapter headings are on a seperate page which is great.
If this isn't what your after sorry for wasting ur time.
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