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I switched from a 505 to a Kobo, but have still been using the Reader Library software to borrow books from the overdrive library. A few days ago, this software stopped working as well. I tried ADE 1.7, and it also failed with a 2038 error.
I was never able to resolve it. My solution was to upgrade ADE to 2.0, and it still works.
It seems that ADE 1.7 and the old Sony software/firmware share the same problem. But borrowing the books using ADE 2.0 or higher and sideloading them into the reader should work.
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