How do I install the firmware on an Arduino Mega clone?
Let focus on one thing at a time, that is flashing the 16u2. You can see if you've successfully done that when you can see the Arduino in your device-manager.

First of, MEGA-dfu_and_usbserial_combined.hex is, as stated on the github page, for the 8u2, not the 16u2. Since you already have a ISP programmer you don't need the dfu functionality.  You can just flash the precompiled Arduino-usbserial-atmega16u2-Mega2560-Rev3.hex file.

The fuses can also be found in the readme.txt on github: -U lfuse:w:0xFF:m -U hfuse:w:0xD9:m -U efuse:w:0xF4:m -U lock:w:0x0F:m. I don't see any difference in the fuses between the 8u2 and 16u2, so they should work for the 16u2 too.

Hope this helps.