Firmware and driver doesn't need to be in the same folder. In fact, you can delete the firmware file once update is completed.
Plug in the iDSD, turn it on, then run iFiHDUSBAudio_dfuapp.exe again - Don't select or install firmware, just check if the program tell you which firmware you have on the iDSD. It should be 5.2.
Now go to Windows setting and uninstall iDSD USB driver, disconnect iDSD and restart your PC. Once PC restarted, install the USB driver, then plug in iDSD and check if the problem still exists. Also, check WIndows sound property and see iDSD is properly selected.
Plug in the iDSD, turn it on, then run iFiHDUSBAudio_dfuapp.exe again - Don't select or install firmware, just check if the program tell you which firmware you have on the iDSD. It should be 5.2.
Now go to Windows setting and uninstall iDSD USB driver, disconnect iDSD and restart your PC. Once PC restarted, install the USB driver, then plug in iDSD and check if the problem still exists. Also, check WIndows sound property and see iDSD is properly selected.