Just an update on the situation...
We did a system format and FBI started working perfectly fine. We signed back in with his NNID, launched Eshop, and everything was peachy.
It looked like the system format created/caused the 3DS to use a different folder in the Nintendo 3DS folder than what was previously being used...
Anyone know why it would make this switch? or why his Sysnand restoration uses a different system folder than what it would if you did a system reformat?
The screenshot below are his Nintendo 3DS folders. The left is his current working Nintendo 3DS folder and the Right folder is the old one. The highlighted folder in the right folder is the old system folder with all of the games installed, which appears to have been deleted by the system reformat.
Anyways, it's all been sorted out, but I'd love to know what happened still.
Thanks for all the help through this guys