I just hit this with my Kindle 2 as well. Books that had been indexed were being called "not indexed." Every book I had wasn't indexed. I tried deleting the indexes (under the hidden system folder) and that didn't work. I thought I had tried rebooting but didn't realize you have to hold the button down for 20 seconds. Once I did that, it appears to be indexing once again.
Still not sure what caused it to stop.
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