Every few weeks, I go around in circles with this "rats, I need a Happy Dance Update" nonsense. Very frustrating, insulting and confusing. I have a Kindle Fire HD7 with all current necessities consistently up-and-running. I have the current version of Snoopy's Town installed: my device/Amazon/Amazon Appstore tell me it's version 1.2.1, though the App Title Page says it's V 2.4. Never-the-less, Woodstock chronically insists on taking me shopping for the nonexistent update, often while checking my internet conection for nonexistent errors at the same time. Amazon is not much help on this ("all of our apps are thoroughly tested and blah-blah-blah, you'll have to wipe clean and start over, boo-hoo...", where have I heard this before?)
Other than waiting for the problem to disappear and return again on its own, one Amazon agent did help me discover a trick that worked ONCE:
Go to settings/manage apps/all apps, forcestop Snoopy (who is by now thoroughly stuck with Woodstock somewhere in the back of Amazon Appstore), and clear the CACHE. Then forcestop Amazon Appstore, and clear the DATA (clearing Amazon Appstore Data will NOT affect game progress, but MAY stop the faulty error messages for a while). Then hard-restart your Kindle (holding power button down for forty seconds to reboot) and wait for a return to all-systems-normal (you may trigger the Kindle's ten-minute process of "optimizing" apps and storage, ha-ha, so you'll have plenty of time for a Happy Dance).
The one time this worked for me, it took me the usual hour-or-so for my Kindle to come out of shock completely after resusitation, and Woodstock had magically flown the coup (probably into YOUR un-updateable Snoopy's Town App!). I am still trying to replicate these results, but it did work for me once for awhile, so I was able to return to trouble-shooting the other issues with this app (like crashing, freezing, and jamming on commercials) the very same day.
If anyone has any troubleshooting tricks to share, I'd love to hear them, as the "experts" seem oblivious to all of this as usual.