It sounds like you've got a lot of experience.
You know this works in CS5.5. I just tested in CS5.5 with a short book with chapters in a book file and it's working fine for creating the "inline TOC".
So I'd suggest first eliminating a couple of things first.
Restore your preferences. This tutorial tells you how if you haven't done it before: http://pfl.com/trb
Less likely, you could have some corruption in your file(s). You could save the files out as IDML and recreate at least a part of the book to test.
I was having the exact same problem, and banging my head on the wall in frustration. I combed lots of blogs and resources, and I finally uncovered the problem. When you are making a book, the odds are high that you will have a few "front matter" documents ahead of Chapter 1, which will almost undoubtably be marked as your "Style Source" document. What I didn't realize was that you need to set up your TOC Style Page in the Style Source document (whatever it may be), and not the TOC document -- or you will experience this problem. As soon as I set up my TOC Style in the Source Style document and generated a new TOC (in the TOC document), everything worked smoothly as before and the ePub now contained valid links to all the documents.
I hope this little tip helps someone else.