Try using a file manager and see if you can find the sdcard folder, it will probably be the same as the USB storage you are referring to.
Yes I found the SD card folder and it seemed to be empty. All the stuffs were dumped into the USB memory.

Try installing free apps like App2sd or similar to see if you can move apps to the external storage. Not all apps can be moved though.
According to him, he tried installing a similar app (forgot the name) but instead of moving it to the memory card all the apps were moved to the USB memory.

Another problem is after uninstalling few apps the free space remains the same.