I'm sorry that i have to dig up this old thread - However i'm facing a similar problem - My glo comes from Mondadori (italian seller).
When i first started it, i've only had about 10 books on it (uploaded from my calibre-library).
I started reading one of the books, when i put the kobo glo to sleep-mode, it was showing the book-cover as set in the settings.
only then i had to delete all my books on the kobo, since i didn't had them as i wished to have them (shelf = series...).
After re-adding the books (which now are quite a few more (about 100)) - I'm unable to display the book-cover.
I've tried it with several different books, and also tried to do a factory-reset.
According to the instructions in this thread, i've removed the "mondadory" - letters from the sleep-mode - however, it still won't show more than the sleeping smilie and "sleep mode", no matter what i change in the settings.
Maybe the Kobo didn't like me to delete the book it wanted to show the cover from - however a factory Reset should have resolved this, but it didn't...
so eighter it's still saved somewhere and the kobo can't overwrite this setting - or there is a bug in the firmware not allowing more than a few books loaded from calibre...
i'd really apreciate an idea about this...