Keyboard in rear usb port not working - geek stumped!

Hi guys, this is the strangest problem I've seen in my 15+ years of being a techie!!!

I have a new pc with a Gigabyte GA-H67MA-UD2H-B3 motherboard and I plugged a Microsoft 600 Wired Keyboard into the rear port (designated for KB/Mouse by Gigabyte). The keyboard works in the BIOS, but when Windows 7 loads, the num lock light switches on, then Windows 7 says that "Driver not installed properly". In the Devices & Printers window, it shows an icon of the keyboard with a yellow exclamation mark and says "hadware not available". However, mouse continues to work.

This happens in all the rear USB ports. If I plug the keyboard in the front port, Windows recognizes the keyboard, install the correct driver and it works! All the USB ports work fine otherwise (tested with thumb drive as well as mouse).

I also tried with a Logitech K120 wired keyboard which also had the same problem. Any ideas on why this is happening? I've been solving PC issues for the last 15 years and still I'm stumped!!!

I have some Dell workstations that have only one PS2 slot for keyboards/mouse, and it works if you have a "splitter", the splitter plugs into the ps2 slot and then you plug a keyboard and mouse into the splitter. I'm assuming you would need to do the same type of thing...then again, maybe not. Just my 2 cents worth here....

Have you updated the chipset drivers?
Intel® Driver Update Utility