after it happens the usb lockup, did you check windows logs in the event viewer? (right click on computer > manage, then event viewer > windows logs from side panel) it should show some messages related to whats happening with the usb stick
Thats the first place i checked
USB transfers are working normally under safe mode (im on safe mode right now, Its all working fine)
Hopefully now with a way to make it work, We can work backwards to figure out whats stopping it, a "clean boot" does not work
thats a good sign, try looking at your startup and see what been added recently, and disable/remove those, something there is probably the culprit
hijackthis log would be of some help as well, you can post the results of the scan here
http://sourceforge.net/projects/hjt/