Hmmm... sounds good so far. K4 diags *should* come with SSH pre-installed, but yours obviously doesn't - and I don't seem to find any image which does. I suggest to ask in the simple debricking thread (I'm personally not terribly involved with the K4, but some other people there should be able to help you).
Another option would be to jailbreak it, install usbnetwork on main, and then SSH into it while in main, and "rm -rf /var/local/*; reboot".
More info:
https://wiki.mobileread.com/wiki/Kindle4NTHacking
PS: I'll move this thread into the dev forum, so it gets more attention from devs who might help.