[MunchkinMan]

First, I want to make it very clear that there is no "backpack" in game terms. Yes, there is a card, Backpack, in Munchkin Adventure Time, but there is no game term backpack. Over the years, I have seen four different meanings to that term, and rather than have there be confusion by everyone using a term that hasn't been identified in the game, we just avoid it. The game terms are this: All Items in play are carried, some are used (or equipped), some are not. Unused Items are turned sideways, as per the rules, so that people can quickly see what Items are providing combat bonuses or special abilities.

Item cards in your hand are not Items. At that point they represent cards. The only time cards in your hand are affected is when something specifically says so.

Given all that I said above, Curse! Unacceptable! does not reference Item cards in your hand, only Items, so that means that only carried Items (i.e., all of the Items you have in play, used or unused) are available for you to choose as the one Item you discard.