Found this from

http://damnsmalllinux.org/cgi-bin/forums/i...int;f=17;t=3061

I also have a lexar 128 jumpdrive.
It boots and works fine on several of my systems using DSL.
Both my systems offer the options to boot from USB-ZIP , which works.
If your motherboard does not offer this option, you may need
to attack the problem another way.

The trick for me was to use the sfdisk utility,
and make the sectors per track at 32

sfdisk -S32 /dev/sda

This makes a type 83 partition on your key.
Reboot, and use cfdisk to change it to a type 6 (fat16)