I'm having the same problem: After a reboot I get the startup screen, then the "dots" within the center circle till its filled, a screen flash, return to the start up screen w/o the" dots" and it locks up.
It all started when I attempted to open an epub book and it locked up. Go figure.
I will try the card format (FAT 32?) with the latest Rc3 software. Will let you know the results.