I didn't make this up myself but found it with extensive searching. To get Duokan to work with 3.2.1 you need to follow these instructions
http://www.nikvdp.com/technotes/?p=79
Basically, you need to install and setup usbNetwork after you jailbreak your Kindle and telnet/SSH into your Kindle. Then run "sh /mnt/us/DK_System/install/install.sh" (without quotes) and restart. Mine said it failed with error 3 but it restarted and Duokan worked right away.