You can also try to extract it to mmc card (preferably second partition, first one as FAT, second ext2) and install bootmenu and boot it directly. This is safer and you have more tries if it doesn't boot first time. Or you can first copy clean sytem to card, boot it and then mount internal flash and extract your data there while booted from card. That way you won't be overwriting live system (an have more tries too).

Also extracting tar to internal flash with jffs2 filesystem will be slow and will not give you optimal result. If you have existing data it is better to extract it to normal filesystem and prepare jffs2 image out of that via mkfs.jffs2 (similar to making ISO image for CD or DVD) and flash such image directly. jffs2 filesystem is log based (i.e. whole filesystem is one big log of changes to previous state) so lot of file removing/creating makes it slower and otherwise suboptimal. It still works of course, it is just not the best way to populate the filesystem.

As for bootmenu and other details, there is plenty of threads here, just search for bootmenu, mkfs.jffs2, nandwrite, sumtool or check https://wiki.maemo.org/Booting_from_a_flash_card

EDIT: And BTW if you have no use for N800 with unreadable display, just let me know :-)