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If you still see the loading squares [ ] [ ] [ ] at bootup, you should be able to trigger the firmware reset using the reset button 5x times (press when the squares show up, until it shows the factory reset screen instead). No need for either image or service in that case.
My Kobo is certainly no longer waterproof after opening it; but that's not a feature I need.
As for blowing the warranty, technically that is the case as soon as you start modding it in any way. Firmware mods can brick the reader, you can hardly blame Kobo for it.
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