OK, in the mean time, a little bit more about the blanket part. It's straight message-format objects, so you can use the usual tools to translate it. (I simply used a text editor).
Here's a short summary of what I did to create this file. Don't blindly copy-paste this, but rather understand it and adjust accordingly.
Code:
scp -r root@kindle:/usr/share/locale/en/LC_MESSAGES/* .
for i in *.mo; do msgunfmt $i > `basename $i .mo`.po; done
for i in *.po; do gedit $i &; done
for i in *.po; do msgfmt $i -o `basename $i .po`.mo; done
mkdir -p de/LC_MESSAGES
cp *.mo de/LC_MESSAGES/
zip -9 -r blanket_de.zip de
scp blanket_de.zip root@kindle:/usr/share/locale/
ssh root@kindle 'cd /usr/share/locale && unzip -o blanket_de.zip && rm blanket_de.zip';
EDIT: Note that it's probably a *VERY* good idea to start with this part (i.e. making sure the /usr/share/locale/ contains a folder for your target locale) before attempting any other localization parts. As stated before, langpicker *seems* to check for the existence of that directory to determine whether a given locale is supported at all. This *may* be the reason for potentially bricking your device if setting it to an "unsupported" locale.