Update:
Using a portable version of Ubuntu on a flash drive I was able to mount my PW3 and saw that there was a SYSTEM VOLUME INFORMATION folder in root with the DO_FACTORY_RESTORE file (the SYSTEM VOLUME INFORMATION folder was not visible through Windows even if hidden files were visible). I deleted the file and folder in root so that it was 100% empty and was able to touch the DO_FACTORY_RESTORE file alone and then unmounted the Kindle.
Result was the same... Device needs repair Error code 2
Let me know if you have any other idea!
Thanks
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