Well, besides qlob, I've successfully broken and later reflashed my K3 - with ATK as well as with k3flasher :-) But maybe I don't count as one of pure "end users" since writing k3flasher :-)
qlob: Please ask questions about ATK in the ATK thread, questions about k3flasher in the k3flasher thread. From what you told, your bootloader and kernel seem to be fine, your root file system however is likely broken. So yes, you need to flash (using ATK or k3flasher) the root file system image that you obtained from the pastebin link to the right offset for the root file system. If you flash it to another location, you will brick other parts of your kindle, so make double sure you enter the correct offset.
Edit/postscriptum: Even if the problem is important to you, I consider it rude to write all-caps subjects. Please don't (in the future).