@Richard Friday  : 
You have used an entirely wrong menu option for USB install.

USB Install can be done correctly After booting from LiveCD and from
System Menu> Administration > USB Startup Disk Creator

If you had installed it from that menu , you wouldnt have encountered
these problems.

Further this is definately , not a papercut , since installing to USB is
not an issue with average users.

** Changed in: hundredpapercuts
       Status: New => Invalid

-- 
Poor choice of device for installing GRUB
https://bugs.launchpad.net/bugs/389194
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