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The solid white line definitely sounds like a manufacturing defect--the E-ink screen has to plug into the rest of the Reader's internals, and wire on the connector is broken, or one of the pins on the connector is not contacting its partner correctly. You should be able to return it under the warranty rules.
As for the second Reader, I'd try installing Connect on another (third) PC, then plug the Reader in. Maybe you should create a new account on Connect with another email address.
Does anyone else have two Readers to try on the same Connect account?
-William
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