If I understand correctly, this proposal uses a globally-shared append-only log (like the Bitcoin blockchain) as a shared cache of server keys (like SSH's caching of the key first seen with a new endpoint).
Once the 'right' key is pushed into the global cache, you can't fool any users who can access that cache.
Revocation or recovery from the 'right' key itself being compromised or lost is still not really handled, though some ideas are discussed in the draft design. But at least later Certificate Authority compromises can't ruin the security provided by a server's declared long-lived key, once it's been registered in the global cache, as long as the server itself manages its own key well.
From the proposal it doesn't sound like it's even a single log, but that each timeline server has its own log. I'm assuming when you publish your SK you send it to all of the timeline servers. So there will be 10-30 global append-only logs which are then mirrored by lots of SK mirroring servers. So not really like the bitcoin blockchain.
update: From the overview it definitely does sound like a single log, but the draft doesn't seem to specify how entries are submitted, replicated, or kept consistent between the timeline servers. This doc seems to hint at some of that: https://git.eff.org/?p=sovereign-keys.git;a=blob;f=issues/ti...
They do handle the key-being-comprised problem. When you register you can list third party keys you trust, which can be used to re-register in case of a key being comprised and revoked (by you).
But you're right they don't handle the key being lost problem (make sure you back it up!)
Once the 'right' key is pushed into the global cache, you can't fool any users who can access that cache.
Revocation or recovery from the 'right' key itself being compromised or lost is still not really handled, though some ideas are discussed in the draft design. But at least later Certificate Authority compromises can't ruin the security provided by a server's declared long-lived key, once it's been registered in the global cache, as long as the server itself manages its own key well.