At this point, the kernel is running multi-task.
The messages are inter-leaved (normal).
Here is what it said:
Code:
EXT2-fs error (device mmcblk0p1): ext2_check_page: x1
"bad entry in directory #4332: : rec_len is too small for name_len -
offset=0, inode=3814195200, rec_len=124, name_len=1490"
Translation:
Only part of the new 'main' file system is written (we could have guessed that from the repeated update looping).
This is progress, really, it is.
I have 'life' to deal with today - more tomorrow morning.
But if your curious, we will be using dd to copy the new mmcblk0p1 image.
Meanwhile,
Download a brand new, fresh, copy of the currently listed PW-1 update package from Amazon.
(For some reason, I don't trust your current copy.

)
Also get the most recent KindleTool from NiLuJe's snapshots thread.
We need to take that new update package apart to get at the main filesystem image.
You will need your device's serial number.
Also use the KindleTool with your serial number to find the password for your diags login.
We will take apart the Update_*.bin package
Use the 'Recovery Menu' to export USB storage again
Copy the rootfs.img file to USB storage
eject, etc...
Use the 'Recovery Menu' function to "exit to shell login"
The 'dd' the rootfs.img file onto /dev/mmcblk0p1
More exact details tomorrow.