Sony Reader "Exceptional internal memory state: formatting" workaround

I get a strange error from time-to-time on my Sony Reader (PRS-650).

After the Reader powers up, or comes out of transfer mode, it does the busy spinner and then says:

+---------------------------------------+
| Exceptional internal memory state     |
| Formatting                            |
|                              [  OK  ] |
+---------------------------------------+

At this point pressing OK will format the device. Yikes!

Short Workaround

1. Do not press OK on the format warning
2. Press hardware RESET button with paperclip

If this does not work, try the following:

Longer Workaround

1. Do not press OK on the format warning
2. Instead, plug device into your computer
3. Backup READER partition (optional, but recommended)
4. Press hardware RESET button with paperclip
5. Wait for Reader to reboot (no PRS+ features when booting with USB connected)
6. Unplug from computer
7. Shutdown/restart reader (PRS+ features will be re-enabled)
8. Problem is gone!

Cause

My theory: PRS+ doesn’t like the device being “dirty” when it is unmounted or ejected improperly.