Ok. I factory reset the device again and the kepub issue is gone for those two books. Some of the kepubs still hang when I open them but after the device restarts, I am able to open them without any issues. But, the battery drain issue is back. At this point, I can only guess that this is because of the firmware. I don't think there is any other viable explanation for it. I have changed the setting for the device to power off after 10 mins to circumvent the battery issue for now. I'm hoping Kobo releases the update to fix this as the email from their rep stated. Thanks to everyone who took time to help me with this. Especially @davidfor. Thanks man.
I'll check with Kobo regarding the battery issue and try to update here if I hear anything.