Well, I have to say, for a "new to linux" person, you seem quite skilled.
Already trying to recompile a kernel, rebuild an initrd... not exactly the things n00b users would be doing at this point... but aside from that...
I too can confirm that VL definitly has a good USB support as any other distro.
I've been booting ISO's from USB
I can boot burned ISO's from a usb cdrom, or internal sata cdrom.. always been able to do it...
I'd look more into BIOS boot options or bootloader problems if I were you rather than remastering the initrd or recompiling the kernel
But that's just me... my $0.02