Ok, with testing on my kindles, I accidentally put an old data.tar.gz for a K4NT on my touch, which had the wrong partition size. I had already copied my data from the touch USB Drive by exporting it in diags.
So I booted to fastboot mode and erased (part of) the "data" partition, which is the USB Drive. I rebooted before it completed, because a damaged drive partition that cannot be mounted will be recreated from scratch, which also creates a new mntus.params.
Now it boots as a NEW kindle touch -- no Special Offers until I connect to Wifi. It now shows as not registered. Connecting to amazon should automatically register it. I will try now...
Yes... I connected to my Wifi network, and registered it by entering my amazon email and password, and it immediately restored my personal settings, including my Kindle name, and my purchased books, and my Special Offers.
So, that works well. MfgTool to set diags mode. Export USB drive and copy your contents to your host PC. MfgTool to fastboot mode. Yifanlu's fastboot tool (sudo fastboot erase data). Yifanlu also provided versions for Mac, and for Windows (running from a cygwin console window).
My testing shows that data.tar.gz gets installed even with a severely bricked kindle, and I display status messages on top of my frozen "Kindle Tree" startup screen, using the eips command.
So, if you cannot wait, do as I did (diags and fastboot). Or, I now have very simple data.tar.gz versions almost ready, that will "damage" selected partitions so that they will be set back to factory defaluts. You can reset partition 3 (/var/local on mmcblk0p3) to fix the "too many books" full partition problem. That will also fix a problem caused by installed a data.tar.gz intended for a different kindle model (like I did). Or you can reset partition 4 (the USB Drive) to rebuild it if you want to.
In my case, I was forced to use fastboot because I had a mntus.params calling a script that rebooted continuously in both main and diags mode.
So in most cases, you can recover from main or diags with a data.tar.gz, after making backup copies from diags, and use the "fastboot erase data" method only for severe boot loop problems.