I'm having the same problem but I think the cause is slightly different.
I have ADE installed in my work and home computer and for any reason I've downloaded books from my Library in both computers. When I connect my PRS-505 in my work computer, all books that were transfered from my Home computer show as protected and cannot be read.
When I connect to my home computer and copy its files again (after deleting from the reader), these start to work properly while the ones from my Work computer start to show the protected error.
Anybody here already experienced that?