Currently experienced this problem with my Nexus 5, when attempting to sideload latest 4.4.1 OTA update via stock recovery.
Solution:
- Open Android SDK Manager (in console get to sdk directory then run tools\android)
- Download/install latest USB drivers (under Extras).
- In Windows Device Manager (devmgmt.msc), right click the Nexus 5 device and select Update Driver Software.
- Browse My Computer for driver software > Android SDK Dir > Extras > usb_driver