I have 2 questions - please bear with me, trying to get you going, promise!
1 - is the USB a direct connection or through a hub?
2 - Just for giggles, have you tried the other cable that came with the cutter? The one that uses the serial port or can it connect to your PC? I know one of my old ones had that connection and another didn't. Sometimes this works better than the USB. I kept getting the "device not found" on one of mine and was able to use the serial cable and it worked fantastically, but never could use the USB on that particular computer.
You can email me directly if you would like. Just make sure you put in the subject line - forum help so I won't think it's junk mail.