Wow. That is one grumpy Arduino... With that connecting and disconnecting (CDC/VCOM) no wonder the USB got confused. When mine "hangs" during upload for more than 8 seconds, a simple hit to the reset button seems to recover it and upload commences.
Fading "D13" is kinda fun. Has anyone got the Serial to come out of serial monitor while a sketch is running? I tried the while(!serial) hack to no avail.