Ok, first make sure you chmod the files in your usb stick don't try it on the cd which you booted from ^^.
Then the changes partition must be a primary drive not logical and in your /sda5/ there must be a folder called "changes".
Dont try to boot with both the CD and the USB stick inserted AFTER you booted from CD and made the changes necessary on the USb stick. Check your syslinux.cfg ammendmends were saved after you made the changes.
There are just some thoughts/ideas which came to my mind when you described your problem.
If it all doesnt work I would try to format the stick completely (you have to format sda5 anyway to make it primary) and copy a clean copy of BT3 and Boot folders in it and jut try again.
I hope I could help a little.