[GoSharks]

It sounds as if you did everything correctly.... My understanding is that the PW can be a little finicky about the size, etc of the png files. You might try following the directions for using the currently reading book cover as a screensaver (add the python and then place the empty 'cover' file in the linkss directory) to see if it will generate a screensaver. If it does, then there may be something about your personal screensaver files that it doesn't like.
You should at least have gotten NiLuJe's generic screensaver after you did the hack. If not, maybe recheck that you used the correct bin file (though I think it would have failed if you hadn't).

Your PW isn't a special offers is it? If so, this hack won't work until you remove the SO.