Like the title says I think this is a driver issue.
I've been beating my head against the wall trying to get my phone recognized by adb in recovery mode with little success.
What I've learned:
My droid incredible has a Hardware Id matching the hack:
%SingleAdbInterface% = USB_Install, USB\VID_0BB4&PID_0C9E
%CompositeAdbInterface% = USB_Install, USB\VID_0BB4&PID_0C9E&MI_01
%SingleBootLoaderInterface% = USB_Install, USB\VID_0BB4&PID_0C94
I can issue "adb devices" at the command prompt and my phone is listed.
This is only in the normal OS, however in recovery mode the Hardware Id changes to:
%SingleAdbInterface% = USB_Install, USB\VID_0BB4&PID_0FF9
%CompositeAdbInterface% = USB_Install, USB\VID_0BB4&PID_0FF9&REV_0100
%SingleBootLoaderInterface% = USB_Install, USB\VID_0BB4&PID_0FF9
If I add the above to the .inf file I can successfully install the driver when the phone is in recovery mode, otherwise Windows complains that it hasn't found a driver for my device. (I had to change the permissions of USBSTOR.SYS so that none of the users had read permissions - this made it so that the USB Mass Storage driver wouldn't auto install and I could manually select the android_winusb.inf driver)
However, after installing the driver this way "adb devices" will not recognize my phone in recovery mode. Don't let this confuse you!!! Windows recognizes the phone as "Android ADB Composite Interface", but "adb devices" list is empty. I believe this is the major problem with the "device not found" error never changing.
This is where my understanding of drivers ends, but to me it seems that perhaps something isn't lined up quite correctly for some of us as far as the driver Hardware Id and the adb tool.
If any of the devs or someone with a greater knowledge of the driver architecture/adb tool care to comment on this to clear it up I'd greatly appreciate it.