@vrybas: Don't reboot with a custom .bin in the root of your Kindle. Always use the 'Update Your Kindle' link. (That's the root of the 0003 errors).
You can 'restore' usbnet by pulling the usbnet folder from the latest usbnet packages and just plopping it in the root of your Kindle.
And, no, you're not on the right path. Besides losing a crapload of time for nothing, you're gonna delete stuff that the official update doesn't even care about. The only thing preventing an official update to run properly is when a *default* file doesn't match (ie. it was modified). It doesn't care at all about extra files. The easiest way to see which files are causing the update to choke is to check the logs. (;dumpMessages or playing with showlog on the shell).
@twobob: He doesn't even have to unpack the .bin, the folder is already in the src/ folder of the zip packages
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Also, if you want the listing of vanilla files of a Kindle, you don't even have to bother with doing it yourself, and you even get the checksum, which is particularly helpful in this case: check /test/diags/factory/rootfs_md5_list