Had the same problem but finally it's working after turning off McAfee's On-Access Scanner, which scans everything you plug into the computer, and by installing Nokia Care Suite, which installs the "Fuse service" that is used to communicate with the nokia phone via usb. I also installed Lumia Software Recovery even though Microsoft has taken it down (googling can find 3rd party links) but it failed to retrieve information from the server but suddenly Windows Phone Recovery could identify my phone and even made it past the "Reading information from the phone" screen that I had also been stuck on
I'm downloading the files to downgrade right now so hopefully my phone doesn't brick in the next critical steps.
tl&dr: I turned off McAfee's scanner, installed Nokia Care Suite + Lumia Software Recovery (which doesn't do anything but installs some critical files i think), and suddenly my phone could communicate with my computer again. Windows Phone recovery can now do its job.