The extra division didn't make sense to me when I read it. I think it is solid enough with the books merging and then dividing without it growing extra pages out of nowhere.
As for the end log, I actually took it as Balswell became so obsessed with "mating" the books together that he didn't really do anything else. So his maid stopped coming because he forgot to pay her, his cat died because he didn't feed it, and Towers (his agent I assume) just gave up on him. After re-reading it I get that the stuff just disappeared at random, but I like my initial conclusion better. =p.
One thing that I think could use a little more information is the time frame and probability we are talking about here. The reason I say this is because the dates on the journal entries are REALLY far apart. Nearly 2 years go by before a second event happens, meaning that either this writer doesn't keep many books around on his bookshelves (which seems unlikely), or that the probability of an event happening is extremely low.
Overall it is promising but I would like to see more.