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Here's the problem and the solution: human error, of course. When you download a Mobipocket PX book, you don't have to register the PID on the site. When you open the book in Mobipocket Reader for the first time, it prompts you to login to the site from which you purchased the book, to activate it. This creates a DRM'd copy of the book.
It's rather important to de-DRM THIS file, not the original file you downloaded.
Umm, duh.
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