Intresting.
Was the upgrade file the same for both the tries, or did she re download it when she decided to upgrade the replacement. Also, did she try using the same SD card on both?
That look likely culprit
Have you tried reflashing it with one of the older builds like 538. While it does not work correctly on the 512 models, It did install on my new Cybook when the newer firmware was not installing. if it installs, it will be easy to overwrite it with a new version like 678/685 etc.
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