So I tried flashing the restore set followed by a factory reset, without allowing my reader to go to sleep in between. The problem, as anticipated was not solved.
Then I backed up the good Reader, in full first, then partition by partition.
I ran a 'diff' comparison between faulty and good PRS-T1s and all partitions differed except fonts.
I restored the preload, system, data and dictionaries partitions from the new to the faulty one using the "dd if=sdb1.bin of=/dev/sdb1" command, etc. Tested it out. Put on sleep and after waking up it seemed to work fine, until I used the browser. The latter applications seemed to hang. At this point, using the dictionary made the Reader unresponsive for around 30 s or more. I tried turning off and on again. No luck. Same situation.
At this point I tried restoring the Diag partition. dd gave me an input/output error. The same I got when trying to do a second full backup of the faulty Reader. Tried modifying some dd parameters (adding "conv=notrunc,noerror", modifying the "bs=" value). No luck. It would stick at 2.5 Mb.
I tried to restore the old Diag backup from the faulty reader. Got stuck at 2.5 Mb as well. Do not know how to fix this. Any clues?
Haven't touched the Recovery and SETTING partitions yet. I might try to see if anything changes.
Tried a factory reset again. Tested dictionary, change dictionary before and after wake up from sleep - worked OK. Set up wifi and opened browser. Browser hanged.
I attached an extract of the logs showing problems with sleep mode. It seems a kernel problem.