I was having the same issue over the past 2 days with sideloaded ePubs on an SD card. I had just ejected it from my KT and inserted into a newly initialized KG. It took about 2 hours for the unit to do the update thing and then continuously rebooted as i read.
yesterday evening i did a factory reset and inserted a blank SD card. after initialization, i inserted a blank SD card and used Calibre to load the books. I've been reading off and on last night and this morning (with or without Glo light) and have had zero issues.
keeping my fingers crossed...