Are you still having this problen? If not how did you fix it?
An old thread, but this sounds like the battery has given out. The NC will reset to the original firmware after 8 failed boots. I suspect the unit has enough charge to start booting, fails, thus incrementing the failed boot count, and eventually completes booting and doing a firmware reset when finally plugged back in. This would explain reverting to the older firmware, and probably the loss of books.
If you've tried all of tech support's recommendations (resetting, reregistering, etc.), then getting a replacement battery may cost nearly as much as simply buying a new reader, especially with the holiday sales at hand.
You could check over on the XDA forums for other alternatives. Be prepared to list out in detail what you've done already (exactly what sort of reset) so people can help.