It seems to me that if the keyboard lights (like num lock) go out and can't be turned back on, it would be a hardware problem. Trying another USB shouldn't make any difference - all that has to do with is the driver. If you type devmgmt.msc and find the keyboard under "human interface devices", you can right click and uninstall the keyboard driver. The keyboard will still have power and num lock will still work even though it's been uninstalled from the system. Having numlock totally go out really makes me think that it's not something you can fix without actually taking it apart. If you did choose to uninstall the keyboard driver to perform my little experiement, plug it into another (or the same) USB, and the driver will automatically be installed and good-to-go again because of Plug and Play. You don't even need Windows Update for almost any keyboard to work properly - working keyboard drivers are right in the BIOS.
I honestly think that it's a physical hardware problem, like the copper wires inside the cord have been broken apart OR the insulation from the wires has worn apart and copper wires that were separated are now touching, which would cause short circuiting (like Zeek pointed out). Obviously, kicking the USB loose from the computer would also cause loss of power.
I think you need a new keyboard... or just put up with the problem. I've been wrong many times before, but I really feel confident in that answer.
