Hey knc1 Thanks a Lot !
Some more progress, now continuing from where I was stuck earlier with the 'E' option (well after your reply), ran that option, waited for a few seconds and connected USB, PC detected kindle and got 'update_bin' transferred, came back to Recovery and option 'U' flashing update.
Now the kindle is up and running...
ps: touch seems to be not working, did all these tinkering anything to do with it or the kindle needs to be reassembled, any idea?