Leappad 2 Stuck on connect screen

[Kris_Perry]

That is a strange one, when you say connect with an exclamation mark, that makes me think it's booting into usb mode (usually accomplished by holding left/right dpad and home while powering on)

If Leappad manager can connect to the device, first thing I would try is to toggle Main_app once or twice, checking how it boots between each.
(Developer Tools > Main_App)
If not I might be inclined to think the DPAD is dirty/stuck/broken and phantom pressing left/right and thus its booting into usb mode, I've done a factory reset/updates myself recently on a Pad3 and while the "disconnect and create a profile" bit is annoying, I didn't encounter this problem.

I would advise against resetting. The setup procedure for some devices seems to be broken..

Bought a used device?
Obtain parental PIN via LeapPad Manager
Change profile information or Create new profiles in the parental settings menu

Deleting Old Stuff?
Toggle into Developer Mode (LeapPad Manager, LoadDev.tar, etc.)
Access Device via FTP
Delete Photos, Videos, Music from /LF/Bulk/Data/Local/All
Toggle Out of Developer Mode (FTP delete [/Flags/Developer], LoadDev.tar)