1. Have you checked what files are on the USB device?
2. Is there a /boot/grub/menu.lst file present?
3. When you created the partition, did you format it?
4. What application/s did you use for this purpose (create & format)?
5. What is the output of the following command?fdisk -l
<that is minus lower case L>
6. What OS are you using to run Live USB Creator from?
7. What are you using as the source files for the USB live install?
8. "I'm using 2011.8 openbox loaded into ram" - does this mean you are running 2011.8 liveCD
from a "copy2ram" boot option? If not please explain what you meant. If yes, please try booting it normally (not copy2ram) and then using the Live USB Creator. Do you get different results - speed of completion the same? - does it boot? etc etc
I didn't even think grub should be needed on a single disk install.
Unless there is a boot manager (in this case Grub) written to the MBR (Master Boot Record) of the disk, that particular disk is not bootable.
Unless the files that it (Grub) needs are where it expects to find them, Grub cannot do its job.
So the first thing to do is to check that the disk structure is what it should be by using the fdisk command and also to check that the files we expect, are present.
Please respond to the above questions as best you can.
If you need explanation about how to get the answers please ask.