@valris
As you see from the rcS file, there are several values that have to be set to run nickel. Even so they get already set, when the rcS is run, they are not seen by the shell that you access by telnet. A comparison of the rcS and the one provided by KSM might not help you much in this case, I guess.
Maybe the easiest way is to make a fresh install. (For the firmware upadate files see
this threat), cf. also the entries of the last couple of days in the kobo start menu threat.