@tomsem: I assume that's the point at which the 'real' update script is called... Hurray for this crazy update process... -_-". (You're talking about the usual boot progress bar (ie boy & tree), not the Update progress bar?)
Have you tried a hard reset to factory defaults? (ie. hold [HOME] during boot 'till the 'type reset' screen appears). If the update process crashed right at the beginning, your Kindle *should* still be in a non-compromised 3.0.2 state. But I can't say that for sure, so you may end up with a bit of a mess... :/.
And if you had the justification setting switched in the userstore, and not the system partition, that shouldn't have anything to do with the update process
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@flandroid: The last notch in the step 1 of 2? That's the kernel flash. Yep, it's potentially a bit scary, sitting there nearly at the end for >45s...
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