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I had the same problem, and since no one ever got around to addressing the content of the original post, and the internet is this great big record that should be complete...
...for reasons that I can't fathom, I don't think any single person is actually capable of making these kinds of mistakes, but corporations seem to make them all the time, some people do not see instructions for upgrading their Kobo when they attempt to upgrade. Instead they get a set of instructions which, if followed, lock the Kobo in "Upgrade mode" but do not actually result in any upgrades being installed.
You should be able to unlock your Kobo by pressing the upgrade button on the back. Its hidden inside a tiny pit, you'll have to press it with a paperclip or the blunt end of a sewing needle or something.
If you want the real (secret?) instructions for performing an upgrade you'll have to contact customer service. Whatever they are they're nearly unrelated to the information I'm being presented with and I've lost patience with trying to guess what they might be.
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