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I did not find this solution previously on the Internet and it can help others.
I have a 2 year old Kindle 3 (Keyboard) with wifi, and it frozen continously. I finally deregistered then wiped then facory-reseted, tried every possible way to re-initialize. Continously means after a couple of minutes, especially when I tried to enter the wifi configuration or register my Amazon account. I have a non lighting cover from the first unboxing, but it did not helped when i restarted the device without it.
I finally decided to tear it apart as it has no waranity yet - and removed all the cables from the main board and the battery. Then waited a couple of minutes and re-installed the battery and the eInk display cable. The device started successfully however without any connected button it was useless. Removed the battery and connected the main keyboard and the battery again. After booting up the keyboard worked, could download a book from the store. I could start reading and the device worked normally, but page forward and backward was not operating. So I turned it off, removed battery and connected the right side keys. (Note: the left side keys have a wire to the upper cover hole!) After this the kindle started once more, page forward and backward is working and the device keeps working after a long time.
As it was problem in previous devices i removed all metallic parts from the lower cover holder before put back the backplate.
So my opinion is that the freezing issue is caused by the cover holes on the side of the device and you have to tear the device apart to solve the issue.
Note: If your device still has waranty, send it back to Amazon, they will replace it with a new one!
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