*** This bug is a duplicate of bug 562312 ***
    https://bugs.launchpad.net/bugs/562312

Okay, yeah I also have a 4 GB drive, and found when setting persistence
to 100% that it didn't leave room for doing a kernel update.  In my case
I attempted to install the nvidia driver, but it's obvious that any
kernel update requiring initrd changes would fail.

I'll go ahead and dupe this bug report at this time since I'm 99% sure
you're running into the same issue.  You should find that with a smaller
persistence file, things work better.  But if not, undupe this bug from
562312 and it can be investigated further from there.

** This bug has been marked a duplicate of bug 562312
   initramfs-tools failed to install/upgrade, due to all space on usb key 
reserved for persistent storage.  No space left to write initrd or vmlinuz.
 * You can subscribe to bug 562312 by following this link: 
https://bugs.launchpad.net/ubuntu/+source/initramfs-tools/+bug/562312/+subscribe

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https://bugs.launchpad.net/bugs/687441

Title:
  No persistence file when creating live usb session

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