I tried the following:
1. I deleted the books from the reader and PC, redownloaded and sycned them.
2. A soft-reset
3. A hard reset
None of them eliminated the problem.
So I contacted Sony support; first via chat which was a waste of time and then on the phone. After talking with the service tech they decided I had a defective unit and are sending me a new one
Of course, after I got off the phone with tech support I saw the email that announced that on 12/11 all ebooks from the sony store will be in epub format, which work fine on my reader. But I'd rather have a working reader anyways.
-Kurt