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I had the same problem with my first Kobo reader -- it froze and couldn't be fixed.
The online support is useless at the present time. I work in publishing and have done business with Kobo, and I've heard that they're simply overwhelmed at the moment due to the problems people are having. (There's also been some staff turnover.) I'm sure their response time will improve once the new firmware is ready -- assuming it fixes the common problems -- but for now, phoning them about the problem is the best bet. I don't find the people you get on the phone to be terribly knowledgeable -- they really don't know how to fix the problems -- but at least they're pleasant about it and can direct you to a store.
It's good that you had a Chapters that had the unit in stock -- when I returned mine, no one in Toronto, where I live, had readers in stock and they could only give me a refund. I had to place a new order myself. So, if anyone's returning a unit, I'd recommend taking it to a place you know has it in stock so that you don't have to go through the hassle of getting a refund and then reordering.
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