OK - so I've just been looking at the many and various brandings of this Chinese controller. Each and every one of the associated manuals say you can run files direct from USB. In fact in order to run from INTERNAL memory the manuals say you must first explicitly copy them to the internal flash.

So you go to the menu that displays U-Disk-File-List and Inner-File-List select the former, select the file and it then scans the file and then you get the "run" screen. If you get to a menu that has the three options View-File, Copy-File, Delete-File then you've gone wrong somewhere - unless of course you actually DO want to copy the file to internal flash.

Re: Converting to Mach3 it should be dead easy. If you look at the link I posted above it has the diagram of the interface card for the pendant. You'll see it's just a plain vanilla step/dir with I/O. If you start with Mach3 parallel port it should be as simple as getting a BOB and moving the labelled wires from the current card to the BOB.