My problem was Backtrack5 R3 (KDE & Knome X32(Both)) was dooing the same
thing...."(initramfs) Unable to find a medium containing a live file
system."

turns out it was because (yes looking back I know it was stupid) 
My Bootloader (YUMI & EadyBDC was NOT recognizing my Intel Raid Storage 
Driver.... Specs aside I ended up using UNetbootin.....and holy shit it found 
my storage driver....booted into Backtrack 5R3 in KDE and Gnome Versions no 
problem. 

Point being, If you have a problem booting into this via USB and have a
3rd party Storage driver installed (or Intel Raid/MB Raid driver
installed) Try Unetbootin....  http://unetbootin.sourceforge.net/

By the way I am not running RAID, I just have the driver Installed... so
I get the CTRL+I prompt EveryBoot to Setup RAID.

Intel Pentium D 3.0Ghz CPU
Intel D945GPM Motherboard ( Bios NT94510J.86A        -     4131.EB)
2 GB DDR2 667Mhz (2x1GB sticks)

*Intel ICH7R/DH SATA RAID CONTROLLER*

WD640 (WD6401AALS)
Seagate 80GB (ST380815AS)
WD 250GB (WD2500YS)

thought I would share my problem... By the way it also did this with
Trinity Rescue The newest to date

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https://bugs.launchpad.net/bugs/543875

Title:
  unable to find a medium containing a live file system

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