Thanks for the detailed post. Most of it is over my head, but I was able to follow the instructions.
Some of my earlier problems were caused because I didn't have the FTDI adapter configured properly on my Mac. It wasn't letting me transmit data, so my keystrokes weren't being detected. As a result, it was booting the kernel and not dropping to u-boot. After struggling with it, I ended up switching to Teraterm on Windows connected to the device.
I used randominsano's technique to write the uImage-eb600em file from the 1.8 update to flash. My kobo's kernel is now 1.8, but I get the same errors when it tries to boot.
Code:
Failed to execute /linuxrc. Attempting defaults...
SBZ: try run /sbin/init
SBZ: try run /etc/init
SBZ: try run /bin/init
SBZ: try run /bin/sh
Kernel panic - not syncing: No init found. Try passing init= option to kernel.
Teraterm didn't have the same ability as cu for sending keystrokes from a file. I used copy/paste to send the encoded bytes, but I also had to use Teraterm's transmit delay, because the paste seemed to skip some characters at full speed. Pasting the uImage-eb600em 1.5 million bytes took over 12 hours. I'll need to find another option to deal with 57 million bytes in fs.img. Putty also had an issue with pasting a large amount of data, and it didn't have a transmit delay option.
Next I followed your instructions for creating a bootable SD card with fs.img from the 1.8 update and rebooted using the bootsd command. Unfortunately, it ends up with the same error:
EDIT. I did something wrong creating the bootable SD...repeating this step