Looks like two separate problems.
1 - The eReader is no longer authorized to your Adobe ID, probably as a result of the factory reset.
You should be able to authorize from the Sony Reader for PC program;
or if you get issue 2 solved, from ADE.
2 - Sony device not recognized by ADE
You need to have a running device driver for the Sony to be recognized by ADE.
(not sure why, no other eReaders have this inconvenience)
Usually, this driver is available as long as you have installed the Sony Reader program,
whether or not you run the Sony Reader program itself.
It seems you have done what you should for this all to work, but ... maybe something went wrong there?
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There are bugs in ADE2.0 with the Sony devices; especially if you use Overdrive library books.
I have found v1.7.2 much more reliable in various ways, it may be worth trying that.
If that works, you should then be able to reauthorize the eReader.
There are lots of bugs in ADE2.0. Try replacing ADE2.0 with the older but more reliable v1.7.2.
(You can have them both installed at once if you like.)
Version 1.7.2, it is a little difficult to find, available on Adobe site for Windows and for Mac.
http://helpx.adobe.com/digital-editions/kb/cant-install-digital-editio ns.html
The forum software is sometimes corrupting the link above. There shouldn't be a blank in 'editio ns.html'. The following redirects to the same page: http://tinyurl.com/diged172
