If you guys that are having problems have reformatted your cards at any stage then you might like to try using the official format software from the SD Association. You can find it at
http://www.sdcard.org/consumers/formatter_3/
Some devices are very sensitive to how cards are formatted and will show strange behaviour if the card doesn't follow the standards 100%.
I know this has fixed SD card problems for other Kobo users (see
this thread).