Sony firmware update is needed.
The same issue is occurring on all models. Only downloading on of the formats at a time is not an acceptable workaround.. Get with it Sony. I just shelled out damn near $400 bucks for a daily edition. When I found that my local libraries use overdrive my pockets (and husband) were very happy.
Kind of frustrating not to be able to get the borrowed books on the reader. I had to delete my borrowed books twice. Deleted from the library then downloaded again. Still nothing. I removed my epubs then put them directly on the reader instead of the memory card and presto...I can now read my borrowed library books.