Dunno if it's the same, but I had a similar problem when adding new books and realising they didn't show up anywhere. The problem was evident when the Kobo, after disconnecting from the computer, would barely reach halfway in its processing bar before rebooting to the I'm Reading screen.
To pinpoint the problem, I ended up resyncing using the Kobo desktop software, figuring that if it was a database problem, the sync would overwrite over any bad parts. The syncing added some books I had bought from their store (I usually prefer to download my purchases as ePubs and add them via Calibre instead of syncing them), but didn't recognise the other books I already had on the reader. Opened up ADE, realised that some items on the reader were showing up with item errors, so deleted them from within that program. Disconnected, reconnected, then realised that in some cases, ADE hadn't physically deleted the file, just removed the listing, so I deleted the epubs from the Kobo drive. Then I readded ePubs, one by one, which worked, showing up in the I'm Reading screen. Two particular ePubs caused the return of the borked processing screen, so I removed those, then added a newly downloaded ePub from MobileRead's PD collection. That showed up with no problems.
I really don't know what went wrong there. I mean, yes, the problem was most likely those two ePubs themselves, but I don't know whether it was the excessively long filenames they had, and when the problem persisted even after I renamed them, had I somehow corrupted the corresponding entries in the reader's database? Was the problem when ADE started showing 'Item Error' for the invisible ePubs? One of them also showed up with validation errors. Grrrgh.
Anyway, I just thought I'd post this so that it might help others searching through the forums in the future. Gordo, I was growing quite frustrated when this problem first occurred, but it was helpful to see the steps you had taken to try to fix your problem.
