Can't add .ACSM files to ADE, message: "Error! Check activation"

Question

I am using Adobe Digital Editions 4.0.3 with a NOOK Simple Touch, running on a 64-bit 2009 Windows 7 machine. Recently I have been unable to download my library ebooks to my Nook. The electronic library I am using (a derivative of Overdrive, I think) only allows the download of books in the .acsm format. However, recently, I am unable to open the books in ADE. Instead, the only option I have is Adobe Reader. When I select the 'Browse' option and choose ADE and hit 'OK', nothing happens and it doesn't show up as an option. When I try and manually add a file to my ADE library, I get an error message saying 'Error! Check Activation". The only thing I even got halfway working was when I downloaded ADE 1.7.2. I got the .acsm files into the library (still, I had to add them all manually through the ADE interface). However, my NOOK will not open these files, even when using ADE 1.7.2. These are the things I have tried:
-Downloading an e-book (in .acsm format) from the Digital Editions free book selections. Same issue
-downloading and redownloading Adobe Digital Editions 4.0.3 (and removing the other program)
-Downloading and redownloading Adobe Digital Editions 1.7.2 (and removing the other program)
-Deauthorizing ADE (Every time it just says "Unable to erase authorization. Please try again after some time.")
-Adding a book in ADE 1.7.2, getting ADE 4.0.3, transferring the book to the newer software, deleting 1.7.2, and syncing my nook with 4.0.3. Nook says it's not authorized
-Doing a factory reset of my NOOK
-Unblocking the .acsm files by going to Properties>General
-TRYING (and failing) to automatically associate .acsm files with Adobe Digital Editions. Like trying to open a downloaded file with ADE, I get no response when I browse and select i
(SIDE NOTE: my Adobe IDs all match. I know that is also not the issue).
I think the issue here is that something is preventing .acsm files from opening in ADE, and nothing in particular is wrong with my NOOK. My only guess (which is probably misguided) is that Windows can't process my request for ADE to be the program to open .acsm files because it's in the x86 program files folder and not the default Program files folder. I've never heard of that being a problem but I can't think of another reason.
If anyone has any ideas, please give them to me. I am actually typing all this for my grandmother, and she is going crazy without her library books.

Answer 1

On the deactivation issue- I just had a similar issue where I could not deactivate and had to manually deactivate by deleting the activation information from Windows registry. That might help you as well.
Follow the instructions below the disclaimer on this page: Error "E_AUTH_NOT_READY" | Digital Editions
Or if you are more computer savvy, simply close Adobe Digital Editions and then delete this registry key:
HKEY_CURRENT_USER\Software\Adobe\Adept