I've used different files, changed the names between prc and mobi.. same results over and over again. It's the EXACT same script that has been working for me, so my guess is it is something with Python. Something isn't set right, etc...
Looking at the event log in the script editor, it quits running at this point:
Code:
tell application "Finder"
get every file of folder (alias "Mono:Users:gideon:Desktop:") whose name extension = "prc" or name extension = "mobi" or name extension = "azw"
{}
get every folder of folder (alias "Mono:Users:gideon:Desktop:")
{}
end tell