Just to be clear, have you restarted your PC? It could have disabled the port until restart.

Looks like not being able to assign a drive letter like they describe can happen if either it was formatted using a Mac in a format other than NTFS (which sounds like you didnt use a mac?) or it otherwise is a protected drive/partition.

Apparently converting the drive from GPT to MBR partition type can sometimes fix it. Here’s a similar thread where someone had the issue: https://www.reddit.com/r/techsupport/comments/9imgfj/cant_assign_drive_letter_to_hdd_option_is_greyed/

I would have said to try installing on different drives but seems like you may have tried that. I think steam will have to unpack the compressed files as it downloads, and slow drives can make it bad. (Or drives without a DRAM cache, and drives that are almost full).

Got any external USB thumb drives or hard drives? Curious what happens if you try to install to one of those. How about while on a VPN? Do long downloads from websites also stop like this?