It would help if you provided a complete debug log. If you don't want to post it here, send it to the email address that CC wants to use.
The fragment you provided says that calibre responded to an "Are you there?" query but did not respond to a connection request in the 1/2 second that CC is willing to wait. The reasons main reasons this can happen are:
- The anti-virus on the machine running calibre is refusing incoming connections.
- The firewall on the calibre machine is blocking port 9090.
- Another device is connected to calibre.
- calibre is connected to a "folder device".
- Another device is connected via cable to the computer running calibre and calibre is continuously attempting to connect to it. Or perhaps the same device that you are attempting to connect using the Wireless Device is already connected by cable.
As for USB connections, CC does not see books that arrive on the device "by magic" (USB, some reader app, etc). It sees only those books that it fetches over one of its connection types.