Answers:
Problem #1
Essentially you have it right. if it is shutting off and changing nands but not booting you need to connect the x7 point on the demon to the kiosk point, if it is shutting off and not changing nands you didnt connect x8 to a non standby 5v power source.
Problem #2
Remove sync wire from demon, and obviously the motherboard.
I should also note that while i answered your questions, if you read the demon install guide, and the info that came with !dswitch app then you would know all of these things already. as for a point to use for x8 there are posts on here that will show you where to connect it.