Hi, sorry for the answering delay, haven't been on the forum for a few days...
For adding a library, there is an option in "sketches" => include library => add zip library, but I suppose what you did was correct. You should see the new library in the menu anyway, in "contributed libraries".
1.6.4 is not the most recent version but anyway, most if not all arduino versions should work. I've just tried with 1.6.5 and it's ok for me.
When I upload a sketch, I must unplug the midi cable from the garvuino, otherwise it won't upload (anyway there should be an error when trying to do so with a midi cable plugged).
When I play a note, the "rx" led is blinking. When I push the switch button, there is a sound, and the blue led (on the board) is blinking as well. Is it the same for you?
Can you try uploading the sid_player sketch? is there sound with it?