I am facing a very similar problem. My first use of this board, out of the box, working with the Getting Started guide LS1046ARDBGSG. The guide states that the D8 LED should be on when the cable is connected, actually it blinks. Disabling the Storage Service has no effect. Moreover, when connecting the USB cable to a Linux machine, it also detects it as a mass storage device with the same files there.
In my case, though, I can see several files in a disk labeled BOOTLOADER. It seems to me like a board configuration issue, I've verified that the switches and all are in default positions. When applying power with the switch, the USB connection is not present at all, and D8 does not switch on.

Edit:
Right, so I've read the relevant related post here: LS1043ARDB-PD USB console can't work, and followed it closely. I've entirely disabled the Storage Service in Windows, followed all instructions carefully. After copying the k22fx512 binary to the BOOTLOADER drive (the LED flashes quicker), and installing the mbed driver again, I've suddenly seen a new COM port in device manager! Connecting to it showed nothing on the terminal, though, so I've reconnected the cable, and got the BOOTLOADER again.
From this moment and on, I'm stuck with the BOOTLOADER - whenever I copy the k22fx512 binary on it, it does everything as in the manual, but then restarts in BOOTLOADER again. Stuck in a loop.