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My problem was similar -- I upgraded to Desktop 1.7.1 and after I synced my Kobo, none of my sideloaded epub files would open. I could select them from the list, and when I clicked on one to read it nothing happened. I hadn't (yet) purchased any books, except for some free ones I'd pretty much only put on for testing, so I didn't really bother trying to debug that.
The solution was fairly simple for me: Plug the Kobo in to my USB, delete all the epub files, unplug it and wait for it to process the content, and then reverse the process. After I plugged it back in, copied the epub files back on, unplugged it again and waited for it to reprocess the files, I could again open the epub files.
Fortunately for me I only read one book at a time and knew which chapter I was on. Also fortunately I hadn't yet purchased anything online.
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