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In Calibre, go into Preferences, Plugins, Device Interface Plugins, and scroll down to the Kobo Reader Device Interface. Make sure that "Upload covers for books" is checked at the bottom. I also have "Upload black and white covers" checked, no sense wasting space on color images when the reader can't display them. Click OK, Apply, then delete the book and try re-adding it again and see if the cover will appear now.
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