I'm saying it sounds like a problem with the iLiad. Wallcraft has given you good advice on how to fix it. If you can't open the free Mobi books downloaded from this site, there's definitely a problem.
This is a "standard" iLiad, isn't it? Not some strange variant bought on eBay? iRex have made iLiads for special-purpose use which don't have the Mobi reader built in.
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