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Not a fix for your Kobo, but if Overdrive books are your top priority you could consider a Tolino. I got my used Shine 2 for around $35 on eBay. It has direct library access.
However, ability to get books directly from a store is iffier if you're not in Tolino's intended European market. There's a thread in the Tolino forum where Rcentros reported on some ebook stores he had tried and whether they did or didn't work.
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