I tried fsck.ext3 /mnt/hda55/xdslfs and it did some stuff, no errors. Something about updating the journal entry from memory. This was booting from a frugal FTP base, and I have no live CD (same deally though I gahter).
Reboot and my loopback still have the same issue. Since with the remount commands you suggested, F: wasn't mounted by default, I though "why not try the loopback install again, but not remount f:?" So I deleted the loopback and swap files, loaded the frugal base, then as root typed:
mount -o remount,rw /dev/hda50 to fix the rewriting issue, then xbox-loopbackinstall
All went ok, no errors. Upon reboots, linuxboot.cfg and ird-loop.gz (i called it ird-init.gz I think earlier, opps, but I'm sure you knew what i meant) were still created correctly. And the loopback isntall seems to work fine now, after several test boots. So maybe me first mounting F: then mount -o remount,rw /dev/hda55 did something funny. Anyways, it appears to be going now.
On a side note, I noticed the erranous "mount: Drive F not mounted" etc errors at boot I was aksing you about (Just after the auto FSTAB creation and the knoppix-boot script) are NOT there anymore, so great work there. Perhaps it was the "^" symbol as you suggested, I never got a chance to try that out. But thatnks again.
(still have yet to try the digicam, but I did a lsmod the other day, and usb-stroage was loaded, so will check into that some more soon).