I had this problem, too, and Taming helped me out. Try this:
From this Kobo help page:
http://kobo.intelliresponse.com/inde...esktop+upgrade
While pressing and holding the Home button, turn your eReader over and locate the small hole on the back.
Slide one end of the paperclip into the hole.
Press gently until you feel a click. Don't release the Home button yet.
You'll see a flashing light next to the power button.
Remove the paperclip.
When your eReader says "Restoring..." let go of the Home button.
When your eReader finishes restoring, connect your it to your computer using your USB cable.
Open Kobo Desktop, and sync your eReader.
PS: If you have been playing with this for several hours, you may want to let the reader charge for a bit before you go any further with resets.
I tried EVERYTHING before trying this and nothing worked--but this worked immediately. Give it a go.