It's funny how everyone has these problems with USB Loader GX when I never had a single problem X) Anyway, it should work fine, there are no specific cIOS you should run (as long as it's above 10 at least lolz) as I've played it on rev14 and also the new current one which has given me no problems as of yet: rev17. I would say bad rip/extract (if that's even possible xD), or you're not on the current revision for usb loader gx. Also, please keep all default settings or change it only if you know EXACTLY what's it's going to do (i.e. pros and cons), you could have the option of running it off an alt DOL on, try leaving it as "default" and see what happens.
Hope I helped ^^