Now I had time to actually debug your preinit script.
What I did, is I splitted the multiboot() section out from your file, edited the paths a bit and then run that script on single user mode from console to see how it behaves. (this is the best way to debug these things, as then normal Harmattan UI does not get in the way of debugging)

I found out that you do have some issues about it, it looks like there is something that causes the script to output a lot of error messages to console and it (just as you stated in your post) does not react to touches but rather calls the evtap command repeatedly before breaking out of the loop.

Maybe if you could explain why you wrote the script that way, and what kind of behaviour you expect from it I can help you to write a better script.