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If you bought books from Kobo, you should be able to download them again, so you won't lose them. And if you have free ebooks, then again you can replace them.
I had a Touch, it went wrong like yours, well out of guarantee. I gave up and bought a Kobo Glo. In a few months the USB port started to fail (not charge) intermittently. I returned it for a full refund and bought an android tablet. Better in some ways, not so good in others, but reliable.
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