Yeah, I've tried a couple flash drives (FAT32 and NTFS) and a USB mouse. The LED on every device illuminates, so it's getting power from my power source, but I haven't gotten a single one of them to actually mount/function. I have like 8 different USB host apps that I've been trying and none of them are recognizing any devices.
You guys know a heck of a lot more about this stuff than me, but I haven't found a single person that actually claims to have working USB audio out from an LGOG on any forums. The confirmation by eXtream, and this thread, are the only instances I have found that suggest the LGOG is capable. I think it's time to throw in the towel :(
If a mouse won't even work then it sounds like your USB OTG cable might be dodgy, or not actually a proper OTG / USB host cable. Try another one.