Sorry to hear about your 505. If you can wait a few weeks, then there is a new Sony model coming out called the PRS-T1. Your profile doesn't say where you are located. If you are in the US or Canada, other options that you could consider are the Nook or Kobo ereaders. They read Adobe EPUB's, and then you wouldn't have to deal with removing DRM and converting to MOBI. You can re-download any LRX files you purchased from the Sony bookstore as EPUB through your account page in the Sony Reader Library software (well, most have them have been converted).
EDIT: Nook and Kobo also have iPhone/iPad apps.
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