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This is pretty odd, you have gone through the common issues that were mentioned by the touch users that had problems. What you have tried has solved the flipped touchscreen issue, for those who encountered it.
To remove KOReader you just delete the koreader folder. (With KSM8 it is also possible to have multiple koreader instalations, but I would get one working normally first.) All you need to do is copy over the koreader folder from the download zip/gz into your device (wherever KSM8 has them now) There is no need to use the KoboRoot.tgz, in the koreader-kobo-arm-Linux....zip download, with KSM as the launcher.
Luck;
Ken
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