If you connect your reader the reader should get a icon in digital edition. Right of this icon has you a Gear. Over this has the option authorize. If not can only authorize over the settings of your Reader.
I fond the gear symbol beside my kobo reader line when connected to Digital Editions. It showed that my kobo was already authorized! As an experiment I deleted all mention of the book I cannot open in my reader. Removed the reader from connection with the computer. Re-connected the reader. Confirmed that the book was gone from the reader. Then removed the authorization from the Kobo reader using the gear option. Again removed and re-connected the reader. Then I reauthorized the reader, apparently successfully. Finally I re-downloaded the book to the reader from Digital Editions. I still get the same "...locked!" message!
So: What do you mean by your line: "If not can only authorize over the settings of your reader". How do I find out how to do this?
You should found this option in the help of your reader.