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Glo Glo stuck at Setup Screen

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Hi

My daughters Kobo Glo is stuck at the setup screen where you are asked to login to kobo.
I updated the firmware to 2.6.1 and this seemed to work but now when you power it on you are asked to go through the setup screen again.
Once connected to the computer the kobo desktop software detects the device and starts the setup.
You are then asked to login to Kobo with your account which when we try it just returns us back to the same login page and goes no further.
We know the acount is valid because we can use that account to login ok on kobo.com website.
Also when try the setup over WiFi option it connects to local network and then when you try to sign in on the device you get a network Error and does not go any further.
Not sure where to go from here, your help is much appreciated.

Cheers

Owen

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