I'm clueless, at this point. Open a support ticket with Kobo. There are two other possibilities.
One is that it is a problem with the Kobo servers tonight. This does happen and the weekend is when they mess with this sort of thing. You could go to bed and see if it is better tomorrow. The other is to uninstall the desktop, reboot, and then install again from the link on the kobo site:
http://www.kobobooks.com/desktop.
You can contact Kobo Executive Care at this email address:
KOBOExecutiveCare@kobo.com
PS: I never had to connect with the desktop after copying in the unzipped files. Then again, I never did it on a device that had never successively been set up. And for all intents and purposes, yours has not.