I am the night.
*nananananananannanananana*
Err, sorry.

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@rogerinnyc: Can you check the MRPI log (in extentions/MRInstaller/log/) to pinpoint the exact failure?
Also, I may have forgotten to mention that after clearing the cover cache, you have to switch to another book than the one you're currently reading (the code is optimized to bypass all processing if the last opened book hasn't changed, regardless of the actual state of the cover cache).
EDIT: At a glance it looks like that step of the install process would be the unpacking step... A quick sandbox test on my PW2 doesn't reveal anything wonky, so, that's weird...
I assume you have enough space left on your device? (Besides, that's one of the checks MRPI does before starting anything, so, I assume yes).