My ability to troubleshoot xbox problems is very limited since I don't have one myself. I assume you followed all the instructions correctly, so the next thing to do is to make a file called kse.log in the same directory as KSE. Then try to perform the exact same edits. Send the log file and the results of whether the xbox rejected the savegame to the email address in the readme.txt.
@Hybris: Haven't seen Kitty Kitty in about 6 months.