Just wanted to add my recent personal experience with downgrading a PW3. I tried to downgrade to 5.8.9.0.1 brand new Kindle, which was never registered. The downgrade worked in the sense the the firmware flashed ok (as confirmed in the menu) but it also left my Kindle in the same state described by others in these threads (only as small rectangle in the screen remained active, error code 2). Since I was still able to USB mount the disk, I triggered a factory reset using the file method. Upon reboot, my Kindle was bricked, with no USB mount possible. I had to use the serial port to drop the latest firmware to the Kindle root directory and upon reboot, the Kindle was working again.
Maybe I could have rooted the Kindle in the funny state immediately after 5.8.9.0.1 had flashed but I didn't try (I thought that a factory reset was all that was needed but it was just the opposite).
Conclusion, the above process is not guaranteed and if something goes wrong, DO NOT FACTORY RESET or you will lose the ability to mount the USB.
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