[davisrs]

NiLuJe... You are a genius! That fixed it!
Thank you so much.

In case anyone else has the same problem running this on a kindle touch, here is how to fix it:
Open vncviewer.lua in a text editor and go to line 282

try_open_input("/dev/input/event0")
try_open_input("/dev/input/event1")
try_open_input("/dev/input/event2")

edit that section by adding:

try_open_input("/dev/input/event3")

After that was fixed, the other issue I ran into was that all my touch controls were rotated by 270 degrees and scaled to the wrong resolution. I fixed it by editing config.lua:

-- this handler will be called upon key presses (input events, actually)
function handleInput(channel, itype, code, value)
--   print("input:", "ch=", channel, "itype=", itype, "code=", code, "value=", value)
   --touch
   if itype == 1 then
      if code == 102 then
	 print("pushed menu button")
	 Quit()
      end
   elseif itype == 3 then
      if code == 57 then
      	 print("MT Tracking ID", value)
	 clickevent = value + 1
	 if x and y then
	    SendPointerEvent(x, y, 0)
	 end
      elseif code == 53 then
      	 print("MT X", value)
	 y = math.floor(value*600/4095)
      elseif code == 54 then
	 x = 800 - math.floor(value*800/4095)
	 print("MT Y", value)
	 if clickevent == 1 then
	    SendPointerEvent(x, y, 1)
	 end
      end
   end
end

Emilis, thank you for sharing your configuration. As it turns out, I had already seen inedible's post, but it hadn't ever work for me (until I edited vncviewer.lua). Since you have successfully used the software in the past, I do have a quick question for you and the community:

The only way I've been able to get a decent refresh rate is to use the '-dither_bw' option. This lets me get a great refresh rate (I can even watch youtube videos on a kindle now) but it comes at the cost of each individual frame looking uglier. Have you had good results without needing to use this option?