Perhaps a bit of a long shot but if you look at the Kobo eReader.conf file in the /.kobo/Kobo directory, under the
[FeatureSettings] header, do you have
Screenshots=true set? That would give pretty much the power button behaviour you are mentioning since the power button is being used for screenshots. You can work around this but using NickelMenu to toggle screenshots on when you want to take one and then toggling back to off after taking the screenshot.
Code:
[FeatureSettings]
ExcludeSyncFolders=(\\.(?!kobo|adobe).+|([^.][^/]*/)+\\..+)|(screensaver_old)
IgnoreCaptivePortal=false
InvertScreen=false
Screenshots=true