Bug#685270: Recreation of 685270
I hope this helps clarify the process I used to try and create the live system.
1. From a wheezy desktop create chroot image for sid.
2. Within Chrooted sid downloaded current git versions and build live-build, live-config, and live-boot.
3. Install built live-build, live-config, and live-boot in chrooted sid.
4. From within chrooted sid, lb config and add live-boot_3.0~b1-1_all.deb and live-boot-initramfs-tools_3.0~b1-1_all.deb to /config/packages.chroot.
5. lb build creating bootable iso
6. Create persistence file named persistence using dd command and format persistence file as ext4 using mkfs.ext4.
7. On boot media install live image created in step 3 (my case USB drive labeled MULTIBOOT which is formatted as fat32).
8. Copy persistence file created in step 6 to root of bootable media (My case same USB drive.) and add the word persistence to boot configuration.
9. Boot and check for mounted persistence using df -h FAILED
10. Rename persistence persistence.ext4
11. Re-Boot and check for mounted persistence using df -h FAILED
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