I was also facing the same issue. I contacted Apple and they reverted back. You can see what my issue was in the following discussion. I hope it will help you
Mohammad Shah Nawaz
Thanks Mohammad - much appreciated.
I also got a response from Apple who said that there was a problem related to fonts and the encryption.xml file
Once we'd removed this we were able to upload the epub no problem.
It's odd that the system seems to say that all is okay when it isn't. We have to rely on guesswork rather a lot using iBook Producer.
Anyway, all sorted now and thank you again for your contribution.
Best wishes and a Happy New Year!