I'm having this exact same problem:
http://bookclubs.barnesandnoble.com/...ly/td-p/687056
But the six reboot solution isn't working for me, nor is the reset to factory settings.
Since my Nook classic was not finding some books in my Library ( even though they were successfully transferred to the device ), I decided to re-format the internal memory with my mac. Now my Nook is totally ignoring internal memory.
I was hoping since some of you guys know more about Nook than I do, you might have some ideas.
My theory is that the reformatting somehow screwed up the Nook's partition map somehow, and the Nook can't figure out what's going on anymore.