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You are in a hard place, because MOBI is essentially dead going forward but you already have a DRM-locked MOBI library. I see only two primary options:
a) Continue to read MOBI on your Gen3, and buy another reader for new stuff.
b) Strip DRM from ebooks and convert them to another format.
Note that with (a) you are betting that your new DRMed format does not eventually die out like MOBI. I think ePub and Amazon (AZW) are both strong for the near future, but all previous DRM schemes eventually became moribund (if they did not actually die).
If you go the stripping route, you can either convert ePub to MOBI or convert MOBI to ePub. I suggest trying MOBI to ePub, because eventually your Gen3 will break and at that point ePub is inevitable. The actual conversion is done by Calibre, which is easy to use. The hard part is getting the DRM stripping to work, but the required script (mobidedrm) can be added to Calibre to make the process transparent. See Apprentice Alf's Blog for a good summary of DRM issues.
With the Gen3, you have the option of either supporting MOBI or ePub - but not both at once. So a no-cost approach would be to download the ePub firmware from Bookeen and convert your MOBI's to ePub.
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