Well, it appears that waiting for a few reboots after installing the driver in the first place did the trick, and it doesn't matter which bios version I used. I also found the the "erratic" USB device disconnecting was happening when I connected with Microsoft's remote desktop. I wish I had nailed down the exact reason the local keyboard and mouse started working but that got lost in the troubleshooting.
So I will let this thread rest for now. Thanks for the feedback.