To clarify, I am using a USB pen drive, but yes the problem is the same in both CD and USB. It's coincidental that you renewed this thread today, as in my 2 hours of driving this morning, the random feature misbehaved so much that I thought about coming home and putting a classified ad selling my HU on team-BHP. (
But I will wait on that at least till the new Kenwood HUs come out and/or I make a final decision on getting a carputer).
Anyway, I am using a simpler workaround than what you suggest, albeit a little similar. Basically I created an empty file (by right-clicking anywhere on your computer and pressing New | Text Document and renaming it AAA.mp3). Since it has 0 bytes in it, the switchover to the next actually-random song is instant. So then I transferred this file (and this file only) in my root, and then all the actual mp3 songs in various folders according to Artist -> Album.
So whenever I want a new random song, I hit "List" and press right. (This can be done alternatively by pressing the round button on the remote and pressing right). This works because AAA.mp3 being the only file in the root folder comes as the default first selection when you hit "List."
As you can see this is a much more elegant solution than yours. (Though nothing would be more elegant than the @$%#@$ random feature to work right in the first place

). But Thanks! I do truly appreciate your suggestion.