Just to be clear, you burned the image onto the SD card using image writing software, right? You didn't just copy it.
I have no idea why the Nook wouldn't boot from the SD card in that case. I guess I would try doing a factory reset
. If you have done that, it has reset the firmware, and it still won't boot from an SD card, then I have no idea what is wrong. Especially if the SD card slot is working for storage.
If no-one else replies you will have to go ask at XDA or somewhere. I don't know much about it. Sorry, I am just giving my best guess.