I don't know about the WiFi not working. I don't have one of these devices to test with. The only thing I can think of is that when connecting, they check if the can reach a URL and drop the connection if it cannot. This is probably
http://www.msftncsi.com/ncsi.txt as that was use by the later devices for several years..
For ADE, the device needs to be seen by the computer. When you plugin the device, is it connecting and does the computer mount it? Can you see the books one the device through the computer? And has it been mounted so that you can write to it?
The image might help, but, your problems do not sound like the usual one. With the last firmware version for the WiFi, some would stop showing any books. They would be on the device when viewed from the computer, but, not shown by the device. The image was the only way found to fix this.