@niluje: for the late reply. I didn't get a notice of reply. I created my images following this link.
http://blog.grapii.com/2011/09/how-t...-screensavers/
My file sizes are no larger than 86k and is saved in png. I also downloaded sample k3 screensaver images from the net saved as .jpg.
http://kindlewallpapers.tumblr.com/
It still doesn't work for me. Stuck at the first image.