Well I finally solved my connection problem by doing the re-set with the pin in the hole on the back of the KT. The KT once again played nice with Calibre until ...
I tried to delete a book from the Kobo Touch's MicroSD card, using Calibre, so that I could re-add it with the metadata additions and new cover and ... the same error happened again!
So we can now trace the problem to trying to delete a book from the SD card in the Kobo Touch using Calibre.
Just wanted to let the Forum know in case any one else encountered this problem.
Also want to thank you Peter for your input that ultimately led to me troubleshoot the solution.
Happy reading to all.