Success! My telnet problems were due to an incorrect network settings on my Debian machine. Using another Linux install solved the issue.

The "Recovery Mode" guide on Zendesk contains a permission error (step 3.2.7) and an unsolvable situation (what if I can't write to my SD Card outside my Jolla?), both solved and reported.

Now going through the 1.0, 1.1, 1.1.0.0.1, 1.1.0.0.2 loooooong lake journey...

Luckily, the shell in recovery mode is excellent! I was able to save a lot of data to the SD Card.