Has anyone ever solved this problem? I have the same issue this morning. My 2008 focus is just over a year old. Everything works this morning, USB flash drive that I have been using for a year works, but no sound. Any help would be appreciated.

I just purchased a 2010 Fusion last week and this has already happened several times with my iphone. I think I can make it happen by utilizing other sync functions (phone, directions, etc) while the music is playing. The way I've been getting the USB to work again is to unplug the iphone while it is playing (but no volume), the display will read something like "device unplugged." Then I'll plug the device back in. Sync will be set on line in, so I just select USB from the media input select menu and it starts working again. So far this method has worked 100% of the time for me (about 5 or 6 times). Its a pita and I wish Microsoft will release a fix soon. BTW my wife's 2009 Mariner has the same problem. One other thing I've noticed about this issue, when there is no volume in USB mode I can change the input to blue tooth media stream and the music plays. That would be fine but you lose the voice control in blue tooth mode.

I finally fixed this problem by installing version 1.3 from this site.