Steve,
I'm not sure about the embedded xml, but have experienced similar symptoms when saving photoshop images in web format using nonstandard color settings, such as cymk, and some rgb color profiles.
"mogrify" and "convert" did not change these as I used them, but might be able to adapt affected images since these commands have much control over image processing. Still, you're probably better off working from originals, if possible, since significant image information is usually lost with each conversion.
Torben
