ISO didn't run when created with livecd-iso-to-disk (Fat32 versus ext3?)

[Linuxguy123]

I formatted the USB drive as ext3.  Its 1 GB in size.

# livecd-iso-to-disk --reset-mbr  --overlay-size-mb
150  /home/xxx/Download/f10-kde-4.1.80-1/f10-kde-4.1.80-i686-200812091339.iso  /dev/sdc1

Verifying image...
/home/xxx/Download/f10-kde-4.1.80-1/f10-kde-4.1.80-i686-200812091339.iso:   a96d2ab033fdb2506f6c0a992ce0dcd6
Fragment sums:
e688f4ff7644a9b4f19db4829273d6ecdfbefd5844559dcae9dd1f628667
Fragment count: 20
Checking: 100.0%

The media check is complete, the result is: PASS.

It is OK to use this media.
Already set up as live image.
Deleting old OS in fifteen seconds...
Copying live image to USB stick
Updating boot config file
Initializing persistent overlay file
0+0 records in
0+0 records out
0 bytes (0 B) copied, 3.4294e-05 s, 0.0 kB/s
Installing boot loader
/media/usbdev.rt821k/syslinux is device /dev/sdc1
USB stick set up as live image!

So I then booted it and got this on the command line:

Mount: you must specify the file system type.
Bug in initramfs/init detected  Dropping to a shell.
Good Luck !
Bash: no job control in this shell.
<shell is non functional>

I ran this same iso a couple times before when the drive was formatted
as FAT32.   Does the livecd-iso-to-disk have problems with a drive
formatted as ext3 ?

Thanks