I struck something like this helping a friend configure a new T1 (I have a 650). She had downloaded several ACSM files from our local library before she authorised the reader (her first). She then authorised the reader through ADE before trying to open the ACSMs to download the actual EPUBS, and received the same messages you did.
We downloaded several free books from Google Boooks and Gutenburg to confirm the T1/PC connection was working (it was). We then deleted the original ACSM files and downloaded again from the library site, and were then able to successfully download the EPUBs and transfer them to the T1. I don't know why it worked, but it did - I can only guess that the ACSM files include authorisation details.
If you authorised the T1 after you orignally downloaded the file it might be worth trying downloading the ASCM file again, then downlaoding the EPUB using trhe new file. Based on what we found yesterday this may help.
Alternatively, try Calibre and Apprentice Alf's solution, as suggested by others.
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