Ok, I was in the same situation and I installed version 3 and it didn't get an error. So, I would just try it again. If it fails again, I won't be able to help you.Hey I have exactly the same issue with my touch 16gb - no Community Sources listed. I have tried the installer update before and had the problem whereby the update installer crashed and the installer icon disappears from the home screen - I then had to restore and redo the jailbreak to get it back.
what should I do - how do I install the installer app 3 without a crash? Are you running 1.1.1 firmware?