As far as the first question is concerned, I can make comments on it.
In the piorineering work by Braverman, it was shown that the intersection cohomology groups ⊕IHT×(C∗)2(UG,B) of the Uhlenbeck compactification UG,B of the moduli space BunG,B of parabolic G-bundle have an action of affine Lie algebra ˆg∨.
http://arxiv.org/abs/math/0401409
This result was translated in physics language by Alday and Tachikawa that the instanton partition function of SU(2) gauge theory with a full surface operator is equal to the conformal blocks of the affine ^sl2 algebra.
http://arxiv.org/abs/1005.4469
The extension to ^slN has been discussed by Wyllard et al.
http://arxiv.org/abs/1008.1412
Therefore, it is expected that the partition function of N=2 gauge theory on S4 with a full surface operator is equivalent to the correlation function of the SL(N) WZW theory.
This post has been migrated from (A51.SE)