I accidentally deleted the system folder (and its contents) in the visible partition of my Cybook. I saw diagonal squares, checkerboard pattern, exactly the same as yours, when I disconnected the Cybook from my PC.
I had a back up on my PC and I copied the system folder back to my Cybook.
If you can access your Cybook via USB connection to your PC, you can check if the system folder is still there...
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