Can you tried different USB ports for the headset? Have you reconnected the cable on the headset side (you'll need to remove the facial interface bracket)?
Yeah, latest drivers should work now.
Could be a number of things, but it sounds like a faulty/broken cable to me. Do you have a friend with a Rift that you can borrow the cable from to test?
Also, regarding that driver, I'm 99% sure the Rift doesn't use it anymore. I haven't had it on my system for months and my Rift works without it. I'm actually about to make a separate post about that and see if we can get clarity from somebody in-the-know.