As mentioned in other posts, RUNME.sh is launched by a custom /var/local/mntus.params script.
If you erase /var/local by copying /dev/zero to /dev/mmcblk0p3, you must reinstall my custom /var/local/mntus.params using my data.tar.gz you can download in my SelectBoot first post. Did you do that? If not, do it -- drop my data.tar.gz on your USB drive, then reboot to reinstall mntus.params, then reboot AGAIN so it will run. When it runs, it looks for /mnt/us/RUNME.sh and *no* RUNME.done file.
Remember, to write /dev/mmcblk0p1, you should boot diags, so be sure to have an ENABLE_DIAGS file along with the RUNME.sh.
You say that you did "data.tar.gz" but there are many variations. Did you use the one from my "SelectBoot" first post? If so, did you make sure there is NO RUNME.done file? Because my mntus.params creates RUNME.done just before running RUNME.sh, to prevent calling it multiple times, RUNME.sh can only run once, until RUNME.done is deleted.
If your main linux kernel is damaged, you need to boot to diags mode, and you might need MfgTool to do that. After the above steps, try booting diags using MfgTool.
So.. verify that you installed MY data.tar.gz and not one of the many others available. Then after TWO reboots look for RUNME.done on your USB drive. This MUST work unless both main and diags partitions are damaged or your main or diags kernels are damaged.
You can ALWAYS recover by booting to fastboot with MfgTool, and flashing the diags kernel and the diags partition (if both damaged) and then booting diags with MfgTool and running SSH or RUNME,sh with linux commands to fix the main system partition. The only way this cannot work is if you are flashing bad image copies, or if you have hardware problems.
At this time, unplugging a kindle USB port, or rebooting the host PC, makes it drop out of fastboot mode (although it identifies as a fastboot device, it sits at the bist> prompt on the serial port)). To use both MfgTool and fastboot, you need to run one of the Operating Systems in VIrtualBox and pass the kindle USB device through to the VM, or you need to run coLinux (but I have not tried coLinux USB support yet). We are working on getting a windows version of fastboot running so you can stay completely in windows, and a working linux sb_loader so you can stay completely in linux, with no need for both operating systems.