Unable to mount USB Mass Storage Devices

https://bugs.launchpad.net/ubuntu/+source/linux-lowlatency/+bug/1068660
Ubuntu Studio 12.10 x86
Gateway NV5378u laptop (No hard drive.)
Installation Medium: sda1 16GB USB created with Linux Live USB Creator 2.8.15, No persistence.
Installed to 16GB USB sdb1 as "/"

Before I began the installation, I did mount sdb to access my Xubuntu 12.04.1 files and save them to a network location.
sdb was unmounted by the Ubuntu Studio installer.

After completeing installation and restarting, I found I was unable to mount USB devices.
 I used the same installer USB to install to a Compaq Evo n610c. It has duplicate icons for Floppy (none exists) but has no troubles mounting USB.

Seeing a working sucessful install on the Compaq, I re-installed Ubuntu Studio 12.10 x86 onto the Gateway. Issue persists.

Yesterday, I received an email:

"Quick and dirty fix - created /media/$username directory, owned by
$username. Now disk is mounted automatically as
/media/$username/$diskname."

I have done this to no effect, the problem persists.

Today (10/23/12) I installed new updates and now:

When I plug in a USB mass storage device, it just blinks constantly and forever.
No icon appears on desktop.
Gparted lists the device with a red triagle with "!" and reports the drive is unallocated.
If I suspend the system, the mass storage device does not power down, it continues to blink.

In order to mount USB devices, I must shut down the system, plug in my Live installer USB and boot from that. Do what i need to do, then shut down. Remove the Live USB and reboot from my USB that has 12.10 installed.