Had to post this in case I run up against it later (or someone else surfing the web comes across the same problem).
Had a user with a new USB flash drive. Insert the flash drive (Win7, 32-bit) and Windows would not recognize it on her machine. Other machines, drive worked fine.
When manually attempting to update the driver in Device Manager, system would return an "access denied" error.
Googled various similar situations. Advice ranged from wiping Windows out and reinstall to copying USBSTOR.INF and USBSTOR.DNF files from DriverStore directory on the hard drive. Tried System Restore but it would fail with "access denied" errors. Tried resetting permissions on various registry entries, system files, etc. None of that fixed our issue after an hour of troubleshooting. Went home to sleep on it at end of day.
Tried to run Combofix, but got a "permission denied" error accessing the registry.
Decided to try Tweaking.com's All-In-One fixer. I ran various permission fixes, etc. Though that seemed to reset certain things, USB stick would still not install. But, it DID let me run ComboFix.
I waited to run ComboFix because I had been poking around MSConfig, per a forum suggestion for similar problem, and saw something weird in there. One of the services set to run was something called "SystemK." I checked it out and it is a program called "Settings Manager" from Aztec Media. It is also listed as malware. So, I took the easy way out and found it in the list of programs I could uninstall and I uninstalled it.
Then, I ran Combofix. I rebooted after Combofix, even though it did not tell me to. I wanted to be sure any services that were fixed and/or removed were still not running.
After I booted back up, I plugged in the flash drive and it failed. But, I went to Device Manager and told it to search online for drivers and that fixed it this time!
The system would not open the "What do you want to do" box, so I typed "Autorun" in the windows search box (when you click the start button) and reset to defaults. Now, that was working again.
Total time on task: 3 hours
Could I have wiped the system clean and reinstalled faster than that? Yes. But then I would have had to reinstall all the user's software (including things like Insight360, specialized mathematics instructional software and emulators, etc).
A weird side-effect? PDFs were no longer associated with Adobe Reader. That was an easy fix, though - just tell Windows what to use to open PDFs.
Hope this helps somebody out there.