diff --git a/repos/gems/src/app/sculpt_manager/main.cc b/repos/gems/src/app/sculpt_manager/main.cc
index 65dae97bf..e67a77f29 100644
--- a/repos/gems/src/app/sculpt_manager/main.cc
+++ b/repos/gems/src/app/sculpt_manager/main.cc
@@ -1099,6 +1099,7 @@ void Sculpt::Main::_handle_runtime_state()
 	_runtime_state.update_from_state_report(state);
 
 	bool reconfigure_runtime = false;
+	bool regenerate_dialog   = false;
 
 	/* check for completed storage operations */
 	_storage._storage_devices.for_each([&] (Storage_device &device) {
@@ -1185,6 +1186,17 @@ void Sculpt::Main::_handle_runtime_state()
 
 	}); /* for each device */
 
+	/* handle failed initialization of USB-storage devices */
+	_storage._storage_devices.usb_storage_devices.for_each([&] (Usb_storage_device &dev) {
+		String<64> name(dev.usb_block_drv_name());
+		Child_exit_state exit_state(state, name);
+		if (exit_state.exited) {
+			dev.discard_usb_block_drv();
+			reconfigure_runtime = true;
+			regenerate_dialog   = true;
+		}
+	});
+
 	/* remove prepare subsystem when finished */
 	{
 		Child_exit_state exit_state(state, "prepare");
@@ -1233,7 +1245,7 @@ void Sculpt::Main::_handle_runtime_state()
 		  | _runtime_view_state.apply_child_state_report(child)) {
 
 			reconfigure_runtime = true;
-			generate_dialog();
+			regenerate_dialog   = true;
 		}
 	});
 
@@ -1245,9 +1257,12 @@ void Sculpt::Main::_handle_runtime_state()
 
 	if (_deploy.update_child_conditions()) {
 		reconfigure_runtime = true;
-		generate_dialog();
+		regenerate_dialog   = true;
 	}
 
+	if (regenerate_dialog)
+		generate_dialog();
+
 	if (reconfigure_runtime)
 		generate_runtime_config();
 }
diff --git a/repos/gems/src/app/sculpt_manager/model/storage_device.h b/repos/gems/src/app/sculpt_manager/model/storage_device.h
index 0c4d288c6..95762972f 100644
--- a/repos/gems/src/app/sculpt_manager/model/storage_device.h
+++ b/repos/gems/src/app/sculpt_manager/model/storage_device.h
@@ -25,9 +25,10 @@ namespace Sculpt { struct Storage_device; };
 struct Sculpt::Storage_device
 {
 	enum State {
-		UNKNOWN, /* partition information not yet known */
-		USED,    /* part_block is running and has reported partition info */
-		RELEASED /* partition info is known but part_block is not running */
+		UNKNOWN,  /* partition information not yet known */
+		USED,     /* part_block is running and has reported partition info */
+		RELEASED, /* partition info is known but part_block is not running */
+		FAILED    /* driver failed to access the device */
 	};
 
 	Allocator &_alloc;
diff --git a/repos/gems/src/app/sculpt_manager/model/usb_storage_device.h b/repos/gems/src/app/sculpt_manager/model/usb_storage_device.h
index fc5e7a635..6e89452ab 100644
--- a/repos/gems/src/app/sculpt_manager/model/usb_storage_device.h
+++ b/repos/gems/src/app/sculpt_manager/model/usb_storage_device.h
@@ -81,6 +81,16 @@ struct Sculpt::Usb_storage_device : List_model<Usb_storage_device>::Element,
 		return drv_needed || Storage_device::state == UNKNOWN;
 	}
 
+	/**
+	 * Release USB device
+	 *
+	 * This method is called as response to a failed USB-block-driver
+	 * initialization.
+	 */
+	void discard_usb_block_drv() { Storage_device::state = FAILED; }
+
+	bool discarded() const { return Storage_device::state == FAILED; }
+
 	Label usb_block_drv_name() const { return Label(label, ".drv"); }
 
 	Usb_storage_device(Env &env, Allocator &alloc, Signal_context_capability sigh,
diff --git a/repos/gems/src/app/sculpt_manager/view/storage_dialog.cc b/repos/gems/src/app/sculpt_manager/view/storage_dialog.cc
index fcbf6f2f9..d0d879594 100644
--- a/repos/gems/src/app/sculpt_manager/view/storage_dialog.cc
+++ b/repos/gems/src/app/sculpt_manager/view/storage_dialog.cc
@@ -275,12 +275,13 @@ void Sculpt::Storage_dialog::_gen_block_device(Xml_generator      &xml,
 void Sculpt::Storage_dialog::_gen_usb_storage_device(Xml_generator            &xml,
                                                      Usb_storage_device const &dev) const
 {
-	bool const selected = _device_item.selected(dev.label);
+	bool const discarded = dev.discarded();
+	bool const selected  = !discarded && _device_item.selected(dev.label);
 
 	xml.node("button", [&] () {
 		xml.attribute("name", dev.label);
 
-		if (_device_item.hovered(dev.label))
+		if (_device_item.hovered(dev.label) && !discarded)
 			xml.attribute("hovered", "yes");
 
 		if (selected)
@@ -307,10 +308,13 @@ void Sculpt::Storage_dialog::_gen_usb_storage_device(Xml_generator            &x
 				});
 			});
 
+			typedef String<64> Info;
+			Info const info = dev.discarded() ? Info("unsupported") : Info(dev.capacity);
+
 			gen_named_node(xml, "float", "capacity", [&] () {
 				xml.attribute("east", "yes");
 				xml.node("label", [&] () {
-					xml.attribute("text", String<64>(dev.capacity)); }); });
+					xml.attribute("text", info); }); });
 		});
 	});