Hmmm. Never heard of that. Not sure how a normal USB drive could be formatted to appear as a CD (except of course by the inclusion of AUTORUN.INF that points to a custom icon for the partition).
Do you actually have one in your posession to test?
I am very surprised to find that GP restrictions are not effective. Perhaps students are disconnecting PCs from LAN at critical moment during logon which can affect GP processing. Are you using a blacklist or whitelist approach for restrictions? In my experience, the whitelist approach is far more reliable.



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