Originally Posted by wolftail
You're not the first one to report this exact behavior. The Kindle goes to sleep normally but for some reason It does not display custom screensavers so the screen keeps the last displayed image.
I have the same issue, after the KT automatically updated when I forgot and left wireless on. Everything else seems to work, just no screensaver in sleep mode and it stays on the last image. And I really, really don't have the technical know-how to even begin to find a solution. (But hey, if you need advice on how to conduct a multibillion dollar international arbitration, I'm your girl.)
I have the data.tar.gz jailbreak installed (not sure who's version), and tried installing Yifan Lu's simple screensaver hack as suggested in the KT wiki page (after carefully making sure all my custom screensavers were properly named and formatted), but no luck. It downloads to the USB drive and onto the Kindle fine, or at least after I disconnect from the computer I get "update your kindle" option on the settings menu so the basic jailbreak is still working. Then it restarts, but eventually I get the "update unsuccessful Error 3" message. I tried to figure out the explanations of how to fix that error in the context of a bricked KT, but frankly got lost in the jargon and was afraid I really would brick my device. So I'm going to keep searching the web for a fix, while hoping that some kind, generous, and non-judgmental developer here will come up with a simple solution to rescue us ignorant non-techies.