I'm no bigwig here, but it's easier to keep your problem in one thread. . .
Let's start here: Exactly which .sbf file are you using?
I had the same message last night and today when applied the 'root' update.zip in stock recovery but it went through just fine. I used the ESD56 .sbf file. I think your problem is with the ROM you're trying to use.
Ok, you've probably all seen my issues by now, but here's a quick recap...
I was rooted several months ago, running Bugless Beast 7.4 on the ole 2.01. Now, I've decided to update to a newer 2.1 rom. I've done all the steps several times to no avail, using SPRecovey and nandroid.
What has been happening is that during the final steps, the reboot into the new rom just cycles through the M logo endlessly. If I try to restore to my saved backup, upon reboot it gets stuck on the M logo, no cycling. Here's where I have had to keep going back to the sbf again and starting over. YES, all steps have been done correctly!
Here's what I've found
I have just re ran the sbf back to stock, no root, nothing. Now I'm just starting to root again, upon entering the oem recovery console I get a message
E: Can't open /cache/recovery/command
What is this telling me and how can I remedy it??
Let's start here: Exactly which .sbf file are you using?
I had the same message last night and today when applied the 'root' update.zip in stock recovery but it went through just fine. I used the ESD56 .sbf file. I think your problem is with the ROM you're trying to use.