1. Can you find a Windows machine and run the Porteus-Installer-for-Windows.exe on it.
2. Try running the Porteus-Installer-for-Linux.com on a non-Xubuntu system.
3. Try formating the flash drive as a single partition and running the install following only the steps in the USB-INSTALLATION.txt file.
Just trying to find a way to create a flash drive that boots Porteus.
There is something different about your system, your hardware, your steps, or a combination of the 3 that seem to be causing the situation because no one else has reported having the same problem. If we can find the source of the problem we can fix it so nobody else has to go thru what you're experiencing.
