I am confused also.
I am running the latest nighty (CM7 #64 050711) on EMMC and from Kernel Manager I flashed the Kernel that said OC 1.3 and it put me into a continual boot loop forever. I finally got back to CWM Recovery and installed my nandroid backup and was back up running with the OC at 1.1 with the 040411 Kernel.
Is this the one that will work with nighty #64
By the way, you could have avoided the full nandroid restore simply by flashing vanilla n64 (or any other recent nightly/stable cm7) and clearing cache in cwm...