+1 gusti

I've been trying to get persistence to work for days and this was the missing data point.

The procedure I did that worked was:
1.  Put keyfob into a linux box.  Use "sudo fdisk /dev/sd-" to nuke all partitions.  Set up two partitions.  Mark the first partition as bootable.  Write the results using "w" in fdisk to write the partition table.  (replace "-" with your actual drive)

2.  Run "sudo mkfs.ext3 -b 4096 -L live-rw /dev/sd-2" to format the SECOND partition.  The name must be "live-rw", not "casper-rw" (replace "-" with your actual drive)

3.  Put keyfob into your windows box.  A prompt comes up asking if you want to format.  Press "format disk" and then "start" then "ok" to allow windows to format the disk.  It will format the FIRST partition as fat32. when you hit ok.

4.  Use unetbootin-win-549.exe.  Click the "diskimage" radio button and point it at the bitcoin iso image.  DON'T put anything in the "Space used to preserve files across reboots": leave that at zero.  Hit OK to start the transfer.  It takes a few minutes.

You're all set.  Your image should now be persistent.  (at least it was for me...)