Remove the USB 3D device.
If you haven't already, go through all the steps here http://wiki.audacityteam.org/wiki/USB_t ... es#trouble
including rebooting the computer.
After reboot, what is the Hype called on the "Recording" tab of "Sound" in Windows? Can Audacity see that same device in Device Toolbar?
If it can, does the Hype have its own speaker where you can test if the cassettes are audible when you play them?
If the Hype is faulty, you can return it and record from the standard cassette player, if your computer has a blue line-in port or a compatible input that can switch itself from microphone to line-in.