I'm not sure what was going on but here's what I did to fix it:
- I configured the device so that there was only one folder scanned and used to send books (just to make is easy to see what was going on).
- I deleted books from the unused folder on the device.
- I connected the device through USB.
- I selected and used "Send to Device" to send everything that showed as not on device (even though I could see the files in the folder on the device).
- After this one book did not show in the Calibre Companion menu so I connected to the conte
nt server wirelessly and downloaded it.
Now all books seem to be synced correctly.