Now this is beyond my knowledge. You appear to have done everything correctly. Sorry. Maybe some other freeper will know better than the both of us.
How does this sound: according to Amazon, the html file and the image file have to be in the same folder at the time the zip file is created. However, the html source in my Word document still thinks the image file is in a hierarchy of folders, i.e. it has multiple slashes in the path.
I will edit the html to have just the image file name. That will tell html that it’s in same folder, I hope. Thanks.