I am experiencing the same problems Styno describes in this closed thread.

In my case I am using a 1GB Kingston DataTraveler USB pen drive. Everything was working fine for almost 2 months (with many restarts in between). Now it has become very unstable. Sometimes I can boot from it sometimes I can't. I can not reproduce the problem. The USB pen drive works fine when using it in other Linux machine.
I have checked the pen drive with badblocks using -F option and everything went fine: no bad block.
I have deleted all partitions and reinstalled everything back in the pen drive as it was before but the problem persists. I took an old hard disk, configured exactly the same as it is in the pen drive, copied all same files into it and it boots perfectly.
It seems to me that pen drive has lost some of its characteristics I can not come up with.
Here you go the log at boot time with the pen drive plugged in. There you can see some strange things when it comes to the USB part.

Code:
Jan  1 01:00:02 kernel: ip_conntrack version 2.1 (128 buckets, 1024 max) - 344 bytes per conntrack
Jan  1 01:00:02 kernel: ip_conntrack_pptp version 1.9 loaded
Jan  1 01:00:02 kernel: ip_nat_pptp version 1.5 loaded
Jan  1 01:00:02 kernel: ip_tables: (C) 2000-2002 Netfilter core team
Jan  1 01:00:02 kernel: ipt_time loading
Jan  1 01:00:02 kernel: NET4: Unix domain sockets 1.0/SMP for Linux NET4.0.
Jan  1 01:00:02 kernel: IPv6 v0.8 for NET4.0
Jan  1 01:00:02 kernel: IPv6 over IPv4 tunneling driver
Jan  1 01:00:02 kernel: NET4: Ethernet Bridge 008 for NET4.0
Jan  1 01:00:02 kernel: 802.1Q VLAN Support v1.7 Ben Greear <greearb@candelatech.com>
Jan  1 01:00:02 kernel: All bugs added by David S. Miller <davem@redhat.com>
Jan  1 01:00:02 kernel: FAT: bogus logical sector size 59904
Jan  1 01:00:02 kernel: FAT: bogus logical sector size 59904
Jan  1 01:00:02 kernel: NTFS: Unable to set blocksize 512.
Jan  1 01:00:02 kernel: VFS: Mounted root (squashfs filesystem) readonly.
Jan  1 01:00:02 kernel: Mounted devfs on /dev
Jan  1 01:00:02 kernel: Freeing unused kernel memory: 72k freed
Jan  1 01:00:02 kernel: Warning: unable to open an initial console.
Jan  1 01:00:02 kernel: Algorithmics/MIPS FPU Emulator v1.5
Jan  1 01:00:02 kernel: usb.c: registered new driver usbdevfs
Jan  1 01:00:02 kernel: usb.c: registered new driver hub
Jan  1 01:00:02 kernel: usb-ohci.c: USB OHCI at membase 0xb8004000, IRQ 2
Jan  1 01:00:02 kernel: usb-ohci.c: usb-00:04.0, PCI device 14e4:4715
Jan  1 01:00:02 kernel: usb.c: new USB bus registered, assigned bus number 1
Jan  1 01:00:02 kernel: hub.c: USB hub found
Jan  1 01:00:02 kernel: hub.c: 2 ports detected
Jan  1 01:00:02 kernel: SCSI subsystem driver Revision: 1.00
Jan  1 01:00:02 kernel: hub.c: new USB device 00:04.0-1, assigned address 2
Jan  1 01:00:02 kernel: 0/0x653d) is not claimed by any active driver.
Jan  1 01:00:02 kernel: Initializing USB Mass Storage driver...
Jan  1 01:00:02 kernel: usb.c: registered new driver usb-storage
Jan  1 01:00:02 kernel: USB Mass Storage support registered.
Jan  1 01:00:03 kernel: usb.c: deregistering driver usb-storage
Jan  1 01:00:03 kernel: usb.c: USB disconnect on device 00:04.0-0 address 1
Jan  1 01:00:03 kernel: usb.c: USB disconnect on device 00:04.0-1 address 2
Jan  1 01:00:03 kernel: usb.c: USB bus 1 deregistered
Jan  1 01:00:03 kernel: usb.c: deregistering driver usbdevfs
Jan  1 01:00:03 kernel: usb.c: deregistering driver hub
Jan  1 01:00:03 kernel: eth0: Broadcom BCM47xx 10/100 Mbps Ethernet Controller 3.90.37.0
Jan  1 01:00:03 kernel: eth1: Broadcom BCM47xx 10/100 Mbps Ethernet Controller 3.90.37.0
Jan  1 01:00:03 kernel: PCI: Enabling device 01:02.0 (0004 -> 0006)
Jan  1 01:00:03 kernel: eth2: Broadcom BCM4320 802.11 Wireless Controller 3.90.37.0
Jan  1 01:00:03 kernel: device eth0 entered promiscuous mode
Jan  1 01:00:03 kernel: device eth2 entered promiscuous mode
Jan  1 01:00:03 kernel: br0: port 2(eth2) entering listening state
Jan  1 01:00:03 kernel: br0: port 1(eth0) entering listening state
Jan  1 01:00:03 kernel: br0: port 2(eth2) entering learning state
Jan  1 01:00:03 kernel: br0: port 1(eth0) entering learning state
Jan  1 01:00:03 kernel: br0: port 2(eth2) entering forwarding state
Jan  1 01:00:03 kernel: br0: topology change detected, propagating
Jan  1 01:00:03 kernel: br0: port 1(eth0) entering forwarding state
Jan  1 01:00:03 kernel: br0: topology change detected, propagating
Jan  1 01:00:03 dnsmasq[82]: started, version 2.22 cachesize 150
Jan  1 01:00:03 dnsmasq[82]: DHCP, IP range 192.168.1.4 -- 192.168.1.250, lease time 24h
Jan  1 01:00:03 dnsmasq[82]: DHCP, /tmp/dnsmasq.log will be written every 8h
Jan  1 01:00:03 dnsmasq[82]: read /etc/hosts - 5 addresses
Jan  1 01:00:03 dnsmasq[82]: read /etc/ethers - 3 addresses
Jan  1 01:00:03 dnsmasq[82]: reading /tmp/resolv.conf
Jan  1 01:00:03 kernel: usb.c: registered new driver usbdevfs
Jan  1 01:00:03 kernel: usb.c: registered new driver hub
Jan  1 01:00:03 kernel: usb-ohci.c: USB OHCI at membase 0xb8004000, IRQ 2
Jan  1 01:00:03 kernel: usb-ohci.c: usb-00:04.0, PCI device 14e4:4715
Jan  1 01:00:03 kernel: usb.c: new USB bus registered, assigned bus number 1
Jan  1 01:00:03 kernel: hub.c: USB hub found
Jan  1 01:00:03 kernel: hub.c: 2 ports detected
Jan  1 01:00:04 kernel: hub.c: new USB device 00:04.0-1, assigned address 2
Jan  1 01:00:04 kernel: usb.c: USB device 2 (vend/prod 0x930/0x653d) is not claimed by any active driver.
Jan  1 01:00:04 kernel: lp0: using parport0 (polling).
Jan  1 01:00:04 kernel: usb.c: registered new driver usblp
Jan  1 01:00:04 kernel: printer.c: v0.13: USB Printer Device Class driver
Jan  1 01:00:04 kernel: SCSI subsystem driver Revision: 1.00
Jan  1 01:00:04 kernel: Initializing USB Mass Storage driver...
Jan  1 01:00:04 kernel: usb.c: registered new driver usb-storage
Jan  1 01:00:04 kernel: scsi0 : SCSI emulation for USB Mass Storage devices
Jan  1 01:00:04 kernel:   Vendor: 0s €Hû €  Model: ôÿÿÿ Ú*€´– Àõÿÿÿ  Rev:   ™€
Jan  1 01:00:04 kernel:   Type:   Direct-Access                      ANSI SCSI revision: 02
Jan  1 01:00:04 kernel: Attached scsi removable disk sda at scsi0, channel 0, id 0, lun 0
Jan  1 01:00:04 kernel: SCSI device sda: 1971200 512-byte hdwr sectors (1009 MB)
Jan  1 01:00:05 kernel: sda: Write Protect is off
Jan  1 01:00:05 kernel: Partition check:
Jan  1 01:00:05 kernel:  p1
Jan  1 01:00:05 kernel: USB Mass Storage support registered.
Jan  1 01:00:05 udhcpc[100]: udhcpc (v0.9.9-pre) started
Jan  1 01:00:06 dnsmasq[82]: read /etc/hosts - 5 addresses
Jan  1 01:00:06 dnsmasq[82]: read /etc/ethers - 3 addresses
Jan  1 01:00:06 dnsmasq[82]: reading /tmp/resolv.conf
Some idea?

PS: Things has become worst since I can not boot from it any loger but everything seems Ok with the pen drive.