(Collections will still be stored locally.

)
The indexer is located in the filesystem at /var/local/cc.db; it is trivial to delete that file and have the Kindle re-index everything... assuming you are jailbroken!
Copying the documents folder to your computer, resetting to factory defaults, and copying them back will have the same effect, though much slower depending on how many books you had.
For completeness, copy:
Code:
documents/ #books
system/thumbnails/ #cover view thmbnails