I had this exact problem troubleshooting a friends's Lenovo B50 Touch laptop. It took me a long time to isolate the problem to KB3088195. However, finding your post enabled me to quickly circumvent the problem by uninstalling the USB blocker application.
I found a thread in Lenovo's community forums detailing what appears to be the same issue so I replied with a link back to this post as one would expect many Lenovo users will be experiencing this issue. Hopefully Lenovo will notice and fix the underlying issue with the USB blocker application soon. But in the meantime, your circumvention should save a lot of aggravation.
Thank you for your post!