I was going to wait to sort everything out before posting the entire list, but here's my steps (so far) cribbed from your notes to me and to benny and a few others.

1. installed Ubuntu 8, downloaded flasher-3, diablo ARM binary, download & install Panasonic LLF program (full format, no erase).

1.5 sudo su
>>> all the following commands need to be executed as root, so either go superuser, or prepend sudo to the commands.

2. ./flasher-3.0 --set-root-device mmc
>>> (well, I ran it and found the stuff to do this, not done it yet, just in case, you know?)

3. ./flasher-3.0 -u -F diablo_ARM.bin
>>> finally realized ./ needed & renamed binary to make it easier to type

4. sudo su
>>> kept forgetting which commands needed sudo, just went to su.

5. losetup -f
>>> gave me /dev/loop1 << apparently 1 being the next available "loop" (virtual disk) on my default Ubuntu at least
>>> note the /dev/loop# and use it in the next command

6. losetup /dev/loop1 rootfs.jffs2

7. modprobe block2mtd block2mtd=/dev/loop1,131072
>>> BUT trying to mount immediately didn't work, I had to pull the extra commands from the script:

8. modprobe jffs2

9. modprobe mtdblock

10. mount -t jffs2 -o ro /dev/mtdblock0 /mnt/jffs2/

11. tar -cf - -C /mnt/jffs2 . | tar -xvf - -C /media/disk
>>> had to add the "-" on the second tar