This is my first post. I had the exact same problem. It started today. I plugged the reader into a computer which didn't have the desktop application installed. I got a message saying I needed to format the drive. I pressed Cancel, and because it spooked me, immediately unplugged the reader, which then said "No books found." Even worse, when I tried plugging it into other computers I couldn't read anything on it: I got the message: "The file or directory is corrupt and unreadable."
I called customer service. They suggested doing a "reset to factory defaults" but that made no difference. So they said it would have to be referred to a higher level of tech support.
Unable to leave well enough alone, we ran CHKDSK on it with the /F switch. There is some improvement: we can now look at the files when we plug it into the computer, including my downloaded books. However, it still claims to have no books on it.
I am trying the "reset to factory defaults" again; maybe it will work better now that the FAT32 errors are corrected.