Try the following two options.
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Try the older v1.7.2. ADE 2.0 is riddled with bugs. In particular, it doesn't like Library books in conjuction with certain eReaders.
(With the Sony PRS-350, I found that having the Sony plugged in would stop ADE2.0 even reading library books from ADE on the PC).
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
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I've never had to try this; just read about it elsewhere. It seems to be a situation where the authorization get confused, and even removing it doesn't really remove it.
Looks like it isn't applicable to all devices: my Sony RPS-350 does not have a directory as in step 6.
On my Bookeen Opus the directory is named '.adobe-digital-editions' as below.
Also, I would have expected a factory reset to clear this directory, but ...???
- Make sure any books you have on the Kobo are safely backed up elsewhere, just in case.
- Deauthorize the ereader (ctrl-shift-E to ADE while device plugged in)
- Close ADE
- Look at the ereader device showing up as a drive on a file manager such as Windows Explorer
- Make sure you are showing hidden files/directories.
- You may see a (hidden) file or directory with a name like '.adobe-digital-editions'
Not the directory 'Digital Editions' which probably contains all the books. - Delete it.
- Restart ADE
- Try to reauthorize the device.
Horrid. Good luck.