I was having a somewhat similar issue except that if I go into the diagnostic screen, the unit is recognized by the PC as a Garmin Device, but not as Mass Storage. When I connect the unit to USB, it goes into Mass Storage mode and starts to be recognized by the PC, but before that is completed, the unit reboots as though it is only connected to a power cable and goes into regular (GPS) operation. I have tried 4 different cables.

While I was typing this, I found the solution to my problem. I had a uSD to SD adapter card in the SD slot (no uSD). When I removed the adapter, the GPS started to work. I hope this will help someone else as I just spent 3 hours tearing my hair out over this!!!!