I found a workaround to the cover arts problems - the trick is to not run canola cleanup - so

(a) Go to application catalog and disable extras-devel
(b) Install canola2 beta 11
(c) Install canola tuning plugin
(d) startup canola, set up your audio folders, and generate the cover arts
(e) shutdown canola
(f) uninstall canola tuning plugin and canola2
(g) Now enable extras-devel
(h) install canola2 2.0.0
(i) Start canola

You should still have your cover arts