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Problem Solved!
Ok, so i've gotten it working now by reasoning out how it must work. It based on my results it appears that the Kindle locates you passively. It doesn't send a ping out for your location when you hit the shortcuts, that would cost a fair bit of change and is pretty much restricted to Law Enforcement use. The kindle monitors signal strength from various towers (over a period of time for accuracy) and eventually deduces the location.
The upshot of this is that you have to have had your kindle on with whispernet activated for a little while for it to locate you. I surfed the web for about a half an hour and then tried the location function and it worked. I'm not sure if it relies on the amount of traffic that you generate as well or if it would work if you just left it on in sleep mode for a while. Anyway, this may be the reason why it was never really implemented. Most people would want to just flip it on and locate themselves.
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