I just got off a chat with Sony support. It is a known issue and here is their response:
http://www.kb.sony.com/selfservice/d...nalId=C1008686
A Protected Page! error occurs on the Reader when opening a borrowed book that is in the ePub or PDF format.
Solution
This may happen when borrowed Adobe DRM-protected ePub and PDF eBooks exist on the Reader at the same time. Follow this procedure to correct this issue:
Delete all borrowed books from the Reader.
Verify that all borrowed books are in the same format (either ePub or PDF) before transferring them back to the Reader.
I did request a firmware update to correct the problem but won't hold my breath. I do not know how to free the epubs from their DRM. Can someone please PM me with help?
Thanks.