I had the exact same problem. My H2O was just resetting and the guide to get a manual factory reset seemingly didn't work. I went to be frustrated, and the device ran out of battery overnight from it's conituing boot loop. I did cantact Kobo support, but was only offered the option to call them -- no help. I posted in a thread here, and got a quick response. After a night of sleep, I again attempted the reset procedure and got it to work. All I can say is that timing is everything. Have your paperclip ready and begin the sequence of four reset button presses as soon as you see the first square in the boot process. I would add that it may be necessary that your pressing of the reset button needs to be at the same interval as well, but I am not sure. Trial and error -- don't give up!
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