I got this error today and was frustrated until I did figure out how to solve it.
The circumstances of my error were as follows: I loaded the Overdrive app on my phone and successfully downloaded an ePub book from my local public library. I had to authorize the app with my Adobe id in the process.
Then I uninstalled the app, so I could show my wife how to re-install it. We re-installed it, and then added our local public library back to the library list in the app. When we tried to download a book, we got the 1069 error - it said it could not find a file (data/data/com.overdrive.mobile.android/mediaconsole/files/.adobe-digital-editions/activation.xml).
Eventually (and thanks to some trouble-shooting directions posted at
http://www.icpl.org/emedia/pdf/overdrive-troubleshooting.pdf) we went to the app menu within Overdirve and opted to de-authorize the app, and then re-authorized it. That worked.
Apparently the problem was that the re-installed app "knew" that it had been authorized, but the authorization file was missing. Deauthorizing and then reauthorizing recreated the file, and all is well.
I hope this helps anybody else who runs into this problem.