I have a Kobo touch with latest firmware. I have the same problem as described by OP. I have tried the proposed solution in post #7 without success. My microSDHC is the following one:
http://ncix.com/products/?sku=62562&...y&promoid=1301
This is a serious bug, as it renders the device useless if using an SD card that is not old. If this device only works with only certain microSD cards, then the Kobo developers need to specify which cards their device works with (tested??). As it stands, I have just wasted money buying additional storage for this device.