Insufficient disk space?

I am trying to install Kali Linux 32 bit flavour on an ASUS eee Pc in dual boot with Windows xp to try to "revamp" it (processor Intel Atom, 60 GB free disk space).
As I want it encrypted, during installation I ran the guided partitioning tool with the default options and chose to keep the / /usr /var /tmp /home and swap on different partitions so that I could encrypt only /var /tmp /home and /swap due to the obvious machine hardware limitations,
The installation run smoothly until to the point of the copying of the files on the hard disk when it stops after 15k files copied due to "insufficient disk space". Initial settings were root partition 450MB, /usr 9GB, /var 3GB, /tmp 350MB /home 52GB, swap 2.1 GB.
I then tried to increase disk space, and set up / 1GB, /usr 10GB, /var 5GB, /tmp 1GB, swap 2.1 GB, the rest in home, but got the same error after 31k files this time.
Considering the OS is on my 8GB USB stick and it takes only 3 GB total on it and it runs without any problem I am not sure it's a disk space problem.

Any suggestions?

Why not just read the documentation? http://docs.kali.org/installation/ka...d-disk-install