iTunes might not like the period in the cover id. Try
Code:
<?xml version="1.0" encoding="UTF-8"?>
<package xmlns="http://www.idpf.org/2007/opf" unique-identifier="BookID" version="2.0">
<metadata xmlns:dc="http://purl.org/dc/elements/1.1/" xmlnspf="http://www.idpf.org/2007/opf">
<dc:title>The House of Silver Oak</dc:title>
<dc:creator opf:role="aut">Nix Winter</dc:creator>
<dc:language>en</dc:language>
<dc:identifier id="BookID" opf:scheme="CustomID">shelly_Silveroak.jpg</dc:identifier>
<meta name="Sigil version" content="0.2.0"/>
<meta name="cover" content="cover_image" />
</metadata>
<manifest>
<item id="ncx" href="toc.ncx" media-type="application/x-dtbncx+xml"/>
<item id="cover_image" href="Images/shelly_Silveroak.jpg" media-type="image/jpeg"/>
<item id="Section0001.xhtml" href="Text/Section0001.xhtml" media-type="application/xhtml+xml"/>
<item id="Section0002.xhtml" href="Text/Section0002.xhtml" media-type="application/xhtml+xml"/>
</manifest>
<spine toc="ncx">
<itemref idref="Section0001.xhtml"/>
<itemref idref="Section0002.xhtml"/>
</spine>
<guide>
<reference type="cover" title="Cover Page" href="Text/Section0001.xhtml"/>
</guide>
</package>
I assume the opf file is in the root folder with two folders, 'Text' and 'Images', yes?