Hi after reading the whole thread I almost lost hope to pass by this error.
It turned out that once you open the back cover of the kindle, theres a small secondary reset/power button beneath the original power button on the board.
What to do?
1) open your kindle and plug it in to the pc
2) set everything in ATK as you would to flash the kernel
3) press the little bugger while holding the vol - button (in my case 3rd press worked the charm)
4) press program in ATK
After few tries it should start working (the rest is like in the original tutorial)
one pic shows where is the magic button
second is a proof that in my case it worked ewentualy
ps. Thanks for the tutorial it got me my Kindle back from the dead !
