Mike Cane found a video today that shows someone reading an Epub ebook on their K3. It turns out I know the people who did it, and yes, they are actually reading an Epub ebook. I'm still in the middle of finding out how they did it, but it doesn't matter. While I was trying to figure out how they read Epub on the Kindle I came up with a whole other solution.
I can tell you how_ you_ can read Epub on your Kindle. I used Ibis Reader, a browser based Epub reading app. It currently only supports DRM free Epub, and it requires an active web connection, but it might be useful to you.
Here's how I did it
Visit the Ibis Reader website and create an account. Find a bunch of the free ebooks you'd like to read and add them to your bookshelf. You're going to want to do this from your computer because the process will go a lot faster.
Open the browser on your Kindle. Go to the Ibis Reader website (ibisreader.com) and login. Open one of the ebooks.
The print is tiny, I know. Move the zoom window to the upper right corner and zoom in. The first thing you'll want to do is increase the font size to one you're comfortable with. After that, move the cursor to the "no distractions". This will reflow the text to fit the browser window, or in this case the text will be as wide as the Kindle screen (but still hang off the bottom).
It's not terrible useful to me, IMO. But it is an interesting curiosity. And I'm pretty sure someone will find a practical use that suits them.