[knc1]

Bad cable ;
or
Bad usb socket ;
or
USB-3 on the Mac.

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You should never flash PW-1 images to a PW-2 .

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Why in the world are you flashing a **Kindle Touch** kernel to a PW-2?
And only the kernel?
And why after you had already successfully flashed the kernel with the fastboot command?

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What was your point in destroying the formatting of the /var/local storage partition?
Did you have reason to force the re-boot process to re-format it?
And if you where going to do that in the very next command, why did you bother to re-set the re-try counter?

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Why do you want to let it install 5.6.1.1 ?
You will probably lose your jail break, because the recovery images do not have the most recent jail break (that can survive the OTA update to 5.6.x) installed.

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What is your problem with asking for advice and not following it?

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Note that the:
./fastboot flash system mmcblk0p1.bin
**Should** have failed because it is too large for fastboot (at least the correct fastboot) to handle.

You should have gotten a failure message.
Since you didn't (I am sure by now you would know to report it in your post) mention a failure message - -
Plus
You have the Kindle's fastboot reporting battery status (another - your kindle only thing) - -

I would suspect a programming error in the fastboot that is running on the Kindle, one that wraps the partition or otherwise writes outside of the partition - destroying the battery ID (and other device specific data).