This bug means that even when “USB flash” is checked in the local resource screen – it does not function in the image.
To fix this, edit /usr/lib/perl5/site_perl/5.8.5/Pxesconfig/PxesconfigGUI.pm
(This file appears in number of places – we fixed all of them, but this seems to be the one that matters – but this might vary from system to system)
Line 8282
$form->{checkbuttonOLDEnableUSBFlashDisk}->set_active($hd);
Should be
$form->{checkbuttonOLDEnableUSBFlashDisk}->set_active($ud);