Had you completely authorized ADE with your AdobeID before you borrowed the book?
If you borrowed it while you were still in the 'authorize this computer without ID' state,
then the book will have been associated with an implicit/anonymous ID rather than with your real ID.
Registering everying with your ID after that point will let you borrow and transfer books in future, but won't give you access to that loan.
In that case, you will not longer be able to read ththat loan on your computer either, nor return the book (you will have to wait for the loan to expire).
If that is NOT the problem, try installing ADE 1.7.2 instead, authorizing it with your Adobe ID, and borrowing and transferring a book via that.
There are lots of bugs in ADE2.0. (though I haven't seen that particular one ... this suggestion is just a guess that might help)
Try replacing ADE2.0 with the older but more reliable v1.7.2.
Version 1.7.2, it is a little difficult to find, available on Adobe site for Windows and for Mac.
The forum software is sometimes corrupting the link above. There shouldn't be a blank in 'editio ns.html'. The following redirects to the same page: http://tinyurl.com/diged172
Thank you so much! I had authorized the computer but not the kobo before downloading the books. Downloaded another book and it works fine. But I still can't get library books to work though, it comes up with the same message. Do I need to uninstall ADE 2.0 to install 1.7.2?
You can have both 1.7.2 and 2.0 installed at the same time.
One of the many bugs in ADE2.0 is that it fails to read library books with certain eReaders plugged in.
Having my Sony plugged in stops ADE2.0 reading a library book; without even trying to put the book onto the Sony.
I think it is the same with some other readers.
No such issues with 1.7.2.