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I do not add their notice to any of mine. All you should need is "Smashwords Edition, which you have.
Mine have "Copyright 2012 John H. Carroll" and it is sufficient. I can't stand that notice they want you to put on either.
As far as why it wasn't accepted, it could be a tiny metadata or table of content issue. It's hard to tell. They don't seem to be good with giving reasons for refusal lately.
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