I had lots of trouble with paragraph spacing and epub. I fixed it in the end manually I recall with a search and replace, or one of the conversion tools had an option to add in a <br>.

Even now, even though I have "always use my CSS" enabled, it still seems to use the epub font size rather than my specified base. This setting does have some effect though, as without it, it uses the epub font type as well as size.

Weird that it isn't "all or nothing" when it comes to css.