I've successfully uploaded a new Kindle book that looks fine except for images that overlap -- that is, the primary image looks fine, but the top portion of the image is duplicated so that it looks like it is on top of a another copy of the same image (about 1/8 of the duplicate shows at the top of each image). This is true of almost all images, but there are a few (about 3 percent) that display properly. My Kindle conversion process was from Adobe InDesign 5, exported to epub format, then from epub to mobi format using Calibre for conversion. Nothing regarding the correctly displayed images appears different from the rest of the overlapping images, including dpi, size, and other image characteristics.
I'm having the same problem after converting a Word.doc to html file to zipped file, then to MOBI in Calibre (using your excellent instructions, JT). The full page cover Calibre added is fine, but most of my other images have that double-vision effect at the top when you view them on a Kindle.
Not only that, but Calibre's auto-generated TOC is screwy-galooey. It randomly grabbed a bunch of hyperlinks and added them as TOC entries.
When I bypassed Calibre and double zipped the same zipped file and sent it to my Kindle by way of my Kindle address, the resulting MOBI file had perfect images. In fact, it also linked my nice handmade TOC to the Go-To Table of Contents button.
The downside of using the double zipped file without Calibre seems to be that I don't get the nice full screen cover image. I'd like to get these problems sorted out so I can "have it all."
FYI, I do have text and a few hyperlinks in between the jpeg images in this book. And I didn't have these problems when I followed the same process with another book which had only one image at the front, in addition to the full page cover.
I finally solved my overlapping image problem by simply increasing the picture size in Word. I had originally sized the picture width to 6.5 inches because I had set my margins in Word to 1". Well, forget the margins.
I went back and selected each picture, went to Picture Tools/Format/Width and entered 7.5 inches. For some pictures, I had to set the width to 8.0 inches or even more to get them to behave. When I looked at them in Word, they seemed to extend way beyond the page and get cut off, but the processing from doc to html to mobi (in Calibre) made them all fit perfectly.
I'm sure you can do the same in any other word processor. You may have to experiment to find the width that works for your pics.