When using the CY3654 development kit make sure of the following:
1) You have configured CYDB for the correct part number (Configure->Target->Update).
2) Once updated and the code is downloaded, make sure you Reset the device and then hit run (this can be done from CYDB, or by simply push the White reset botton on the CY3654 platform board).
3) When running, plug the USB cable from the PC into the USB port on the application board. Please note, do not plug the USB cable into the USB port on the main CY3654 platform board. The USB port on the main platform board is unused. Plugging the USB cable into the USB port on the main CY3654 platform board will result in an unknown device showing up in the device manager. If this happens simply remove the cable from the platform board and insert into the application board. See section 1.3.1 Hardware Installation of the CY3654 Users Guide for further details.