I wish I had an answer, but the same thing is happening to me. Can I go back to the old version of Digital Editions, please? Any help is greatly appreciated.
Update: While I didn't answer the question above, I did manage to fix my problem. Here is the background: My old Nook was a Nook Color, which, while it was greatly loved and semi-intelligent, it wasn't a tablet. When I connected it to my computer, it was recognized as a device and showed up in Digital Editions. My library uses Overdrive to handle the borrowing and download/reading functions. When you borrow a book, you downloaded it to your computer, opened it in Digital Editions, and then did a "drag and drop" into your Nook. I had assumed that when I got my new Samsung Galaxy Tab Nook, it would work the same way. I had not adjusted my thinking to realize that the Tab is a true computer with an operating system (Android) such as that on my laptop. I was trying to fix the problem with the DRM authorization using every other ePub reader that I could find (installing the app and then attempting to open the book) and nothing worked. I finally got a message that clicked saying "You do not have rights to open this book" rather than the unhelpful message that I got from Digital Editions saying "Error! Check Authorization". I looked at my library's website and caught the notification that Overdrive has an app. I downloaded and installed it, connected to my library, logged in using my library card number and everything was there. Now, instead of downloading to my laptop and then moving the book to my Nook, I directly connect to my library's website and download the book to my Galaxy Tab. I could read directly in my browser (provided I was connected to the internet) but downloading ensures that I can read the book in any situation.
This absolutely does not fix the problem in the question above, nor does it answer why my old method worked for exactly two and a half books and then stopped working, but at least I learned something and I have a solution that means my Galaxy Tab can be used for the primary function of my old Nook, that of packing library books with me no matter where I am in a lightweight, easily read format.