Is this a known issue related and if so
Well it was a known issue for rt2500pci and rt61pci, I am not surprised about rt73usb joining the club.
a) is it related to the tx ack problem that stops hostapd working?
Possibly, but there might be additional problems as well. I think rt73usb suffers from the same problem as rt2500pci and rt61pci which was caused by the wrong TX ACK timeout value.
b) is there any help needed to fix it?
Could you please try rt2x00.git to see if the issue persists, I committed a fix in there which solved the problem for TX ACK timeout, a fix for the hostapd issue is also in there.