I figured out my problem, for some reason the file was corrupted or something, i went to website in description of KOF on homebrew channel and downloaded this file from the website and put it in the apps folder.
(account to new cant send links, sorry)
Hope this helps!
I am also having trouble getting KOF to load up. starts black screen then goes to white then sticks on black, i have newest plugin pack and the KOF files on SD.