The 1609 is an incremental build and requires SDK 2.0. The fetch problem is likely unrelated to your kernel per se and I have noticed the same issue when trying to build the ls1043 from a git repo.
Are you using the .iso SDK 2.0 for the build? If so it should not break when doing a fetch since sources are fetched as compressed files and placed in the source directory then bitbake uses these to build.
Are you pulling a git repo from the i.MX site and what commands are you using to pull and build? What commands are you using when getting and building SDK 2.0?
Similar problem exists when doing the following:
: mkdir ~/bin
$: curl https://dl-ssl.google.com/dl/googlesource/git-repo/repo > ~/bin/repo
$: chmod a+x ~/bin/repo
$: PATH=${PATH}:~/bin
$: mkdir fsl-qoriq-sdk
$: cd fsl-qoriq-sdk
$: repo init -u git://git.freescale.com/yocto/fsl-yocto-repo.git -b refs/tags/fsl-sdk-v2.0-public
$: repo sync
$: . ./fsl-setup-env -m ls1043ardb
$: bitbake fsl-image-full
See the following community pages:
https://community.nxp.com/thread/435914
https://community.nxp.com/message/836656?commentID=836656&et=watches.email.thread#comment-836656
