I have a pretty similar problem.
I'm using an Asus A7N8X Deluxe Rev2.0. As suggested by Asus-Support I upgraded the BIOS to 1007 (currently latest version).
With this version it is possible to select to boot from USB-HDD, USB-FDD, USB-ZIP and USB-CDROM.
I bought a external HDD housing (Type ICY BOX IBU 350 U, USB 2.0 see www.icybox.de
A WD 80GB HDD is running in that housing. I have installed the Knoppix 3.4 to that HDD.
I tried all of USB-XXX Boot settings, but it did not boot from the USB-HDD.
Unfortunately I cannot verify, that the USB HDD is bootable at all, because I don't have any other machine available, that supports booting from USB...
Does anybody know, if all USB-HDDs must be bootable my design?
Has anybody experience with this housing?
Thank you very much,