Ok, I got it all working. Here is what I did for any future visitors/googlers.
For PW1 on firmware 5.6.1.1
downgrade to 5.4.4: Download
https://s3.amazonaws.com/G7G_Firmwar...ndle_5.4.4.bin Put file in root of kindle. While it's still connected via USB, hold power button for 20+ seconds til the Kindle reboots and the install occurs. It takes a while, be patient. Once it's fully restarted, you can check Device Info and see you are now you are on 5.4.4 and can jailbreak!
jailbreak your Kindle https://www.mobileread.com/forums/sh...d.php?t=186645 In a nutshell... download k5 jailbreak from
https://www.mobileread.com/forums/sh...d.php?t=225030 and follow instructions
You are now jailbroken.
install everything you want/need. I installed KUAL with KOReader, gargoyle, kterm, pwchess and the screensaver hack.
manually install 5.6.1.1 - download the firmware from
https://s3.amazonaws.com/G7G_Firmwar...le_5.6.1.1.bin - use USB to put it in the root folder of the kindle then go to settings and choose Update Your Kindle. Once that installs, check Device Info on your Kindle and you should be on 5.6.1.1
install hotfix: K5 JailBreak Hotfix
https://www.mobileread.com/forums/sh...postcount=1597 follow the instructions
restart your Kindle twice, back to back
DONE! Enjoy!