Speaking of a usb created with the "universal usb installer" ! ?
I think this is the problem.
Most 3rd party USB installers can't handle the system well.
I believe you can't even get persistence working on your stick.
Furthermore, you're trying to re-invent the wheel here, when you should just modify your onboot.lst
tce-load -wi Xorg-7.7-3d firmware-radeon xf86-video-ati alsa-config pavucontrol htop windowmaker windowshot ezremaster xfe aterm wbar kmaps getlocale firefox_getLatest