Already been discussed; it's because the Sony PRS-505 has a 300KB limit for a single flow in an ePub file. In order to confirm that this is indeed the problem you're facing, open the ePub file in whatever application is used to open .zip files on your platform. If you're on Windows, that would be WinZip. Then check the file size of the .xml files inside. If any of them is larger than 300KB, there's your problem.
You're not the first ones to be bitten by this bug, but it's kinda cool to see you're reading the same books as me. I actually hit upon this post yesterday evening when searching for a reason why Scratchmonkey didn't load in my freshly unpacked 505, and Blindsight is in my collection as well.
References to this bug can be found all over the web; for example right here in these forums:
https://www.mobileread.com/forums/sho...ighlight=300kb
How to solve it? There are at least two options: you could convert it to .lrf, you could edit the xml and split it into two flows. Perhaps there are other options, but I'm blisfully unaware of them.