At some point while using CM7 on the card, you went into the ROM Manager application and chose "Flash ClockworkMod Recovery," which didn't appear to do anything, but in fact installed ClockworkMod to the recovery partition of your NC, which interferes with the update process. Your simplest option would probably be to flash 1.4.1 from CWM. First, flash CWM again(as above) to make sure it's current.
Grab the last file from the OP of this thread:
http://forum.xda-developers.com/show....php?t=1253525
Put the file on a SD card (your CM7 card will not work, unless you format it with SDFormatter first), then boot into ClockworkMod using this method:
Quote:
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Originally Posted by verygreen
hold nook N key and then press and hold power until the "Loading..." message appears and then disappears with screen going blank. Release power button, then press it again and hold for ~5 seconds, the bootloader "Loading..." message should be on the screen for three seconds or so before you release power button, keep holding N button until screen blanks again. If the screen went off while you were holding the power key, that means you were holding it for too long
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Volume keys move you up and down, power is "back" and 'n' is "select."
Under "Install zip from SD card," "Choose zip from SD card" and choose the file mentioned above.
When the update finishes, hold the power button until the NC shuts off, then turn it back on. CWM should be gone and 1.4.1 installed.