I have had that exact same problem on my usb when playing with DSL in Ubuntu; it would rename DSL to dsl and then I'd have issues.
No idea what causes it?
However; I usually moved (cut/paste) the dsl folder off usb, to my Desktop, Chowned the usb with
"chown -R bz /media/usb0" where bz is my username and /media/usb0 is where it's mounted.
Then renamed dsl to DSL and moved it back to usb, then all was good.
You may want to try partitioning usb; first partition as ext2, bootable.
2nd partition FAT32 for exchanging files between linux and windows.
Then install grub to usb-it will boot faster and will even boot on pc's that won't boot off usb if you use plop bootmanager cd or floppy. ( http://www.plop.at/en/bootmanager.html
To install grub to usb is really easy!
1st DIS-CONNECT your hd from motherboard; set bios to boot from usb, if it can.
Use any ubuntu livecd and boot livecd
insert usb once ubuntu desktop loads.
assuming usb already parttioned, etc
make boot/grub folders on usb and copy grub files from cd to usb
"mkdir -p /mnt/usb/boot/grub" (where /mnt/usb" is mountpoint- could be /media/disk or /media/usb0
"cp -a /usr/lib/grub/i386-pc/* /mnt/usb/boot/grub/"
Then use nano to create menu.lst unless you already have one.
Then install grub to usb as if to hd
All should be good.
You can use my menu.lst from my site, simply edit out the tinycore entries and put dsl/geexbox entries there.
also edit out menu colors and splashimages unless you download and put into /boot/grub/
NOTE, using grub a dsl syslinux.cfg entry will change-
syslinux.cfg dsl entry
append initrd=/boot/minirt24.gz quiet restore=hda1 mydsl=hda1 etc etc etc
change to this for grub; put append line at kernel line
kernel /boot/linux24 quiet restore=hda1 mydsl=hda1 etc etc etc
That may solve your problem-booting geexbox off ext2 it will not re-name it.