Lyx -> Calibre -> Kindle graphics

[shorero]

I have a Lyx document that I'm trying to convert for Kindle use via Calibre. The document contains multiple screenshots that are saved as .png files. I export the document from Lyx using the HTML(Word) exporter and import it into Calibre. I convert it for the Kindle (MOBI) and use the Calibre viewer to look at it. The conversion looks pretty good, with all the section headers and bullet lists intact, except for the screen shots which seem to be converted into very low res graphics - essentially useless. I'm assuming that there is a problem with Calibre and .png files. Questions:

1. Does anybody have alternate suggestions for building content that can be output and flowed in a Kindle?

2. Does anybody have suggestions for alternate graphics formats that might be both Lyx and Calibre friendly?