1. the usb has a fat32 filesystem
syslinux has instructions on how to load it
Have you loaded dosfstools.tcz ?
IIRC, you would need that to have read/write access for a fat32 file system.
2. i use home=sda1 as the bootcode to try to get to the usb
I'd go for the UUID method.
To find out your UUID, type
blkid /dev/sda1