@theladycatelyn: when building the mailchimp campaign, on the RSS feed page (the first one for me), you’ll see an option to ‘send only on these days’. Right below it is a checkbox that says ‘Resize RSS feed images to fit template’. Unchecking that box worked for me (got the images to show at the correct quality).
Using *|RSSITEM:CONTENT|* got me the highlighted image and a block of text. I am not able to control how much text is selected and where the cut off is. Still working on that, if it is at all possible to control. Also don’t have a space between the image and the paragraph, which is ugly. Need to figure out where to put that custom CSS.