If you can reach the UYK button unregistered, then you don't need to register it (with that firmware version).
No, you don't have to step through all intermediate versions.
Your PW3 uses complete system images as the update.
That "in no particular folder" may be your problem.
Put the update file in the top (highest) visible level of USB storage.
Your choice:
5.8.7:
https://s3.amazonaws.com/firmwaredow...hite_5.8.7.bin
These two can not (currently) be jail broken, if that is a consideration for you.
5.8.8:
https://s3.amazonaws.com/firmwaredow...hite_5.8.8.bin
5.8.9:
https://s3.amazonaws.com/firmwaredow...hite_5.8.9.bin