As the Nook uses Android, perhaps you can root it and install an alternative ereader app? (I am sure there are clear layman's directions around wherever people go to root their Nooks, although never having owned one I don't keep track...)
Sorry

but I have always gotten the impression that Nooks are best for rooting and using as something else.
Outsourcing their tech support to India is merely the latest in a long line of dropping-the-ball moments.
...
From what you say, the builtin reader software seems to have a problem rendering blank lines in any way shape or form, so the only other solution is probably to edit every single book and add visible scenebreaks. I should note that I have
always preferred the following HTML instead of blank lines (graphics are okay too I guess, but blank lines are just
ugly):
Code:
HTML:
<p class="scenebreak">* * *</p>
CSS:
.scenebreak {
text-align: center;
text-indent: 0%;
margin: 1em;
}