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Did you ever get it working? I just figured it out and it worked. Don’t do a factory reset just sign out of your Kobo account, let it do it’s thing and then you have to set up the reader again BUT all of your books sideloaded will still be there any any Kobo purchases just have to be downloaded and you’re good to go
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I had the same problem (logging into Overdrive via account or Library Card would just return me to the starting login page) and this solution worked for me. Thanks!
One thing however. While I did not lose my books I did lose my read/unread metadata on side loaded items. Not really a big problem for me but be aware.