Having the same problem with my stick:
ID 1131:1001 Integrated System Solution Corp. KY-BT100 Bluetooth Adapter
Adding HCI_BROKEN_ISOC to hci_usb.c worked for me as well:
{ USB_DEVICE(0x1131, 0x1001), .driver_info = HCI_RESET |
HCI_BROKEN_ISOC },
Using Ubuntu 8.04 and kernel 2.6.24-19-generic #1 SMP Wed Jun 18
14:43:41 UTC 2008 i686 GNU/Linux
** Attachment added: "lsusb_output"
http://launchpadlibrarian.net/15841782/lsusb_output
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syslog is flooded with messages after connecting bluetooth usb dongle
https://bugs.launchpad.net/bugs/39414
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