[Installation] Installing on a USB HDD, fails at install step.

Hi guys, thanks for any assistance I have been trying to fix this on my own for days now and I am getting nowhere so I come to you for help.

I used Win32 Disk Image to write to a 8gb USB stick with the Kali Linux 64Bit.iso install.

What I am trying to do is create a full disk encrypted 16GB USB bootable Kali installation, I booted my computer to the 8GB USB stick with the Kali Image I followed the Graphic/text installation prompts and selected my 16GB USB stick with the encrypted partitioning and installation option.

It gets all that fine and what not it allows me to select the 16GB USB as the destination for the install and it formats and disk and creates the correct partitions, however the next step on the installation screen goes to about 30% half way and then a error just pops up saying installation has failed please try again.

I tried many many times booting from LIVE and installation while in linux, using the text install and I am still always getting stuck at this step.

I have now written the 64Bit Kali Install onto my 16GB USB stick and I can boot find into live or live with persistence however none of my settings will save, which is quite a pain.

So my question is does anyone know a solution to my installation problem OR if not is there anyway I can boot Live Persistence Encrypted but allow my settings to save?

Thank you for reading my wall of text if there is any more information you need or some outputs I will be on 4 hours from the post and happy to post whatever you need.

Nov 8 04:34:57 base-installer: error: The tar process copying the live system failed (only 243824 out of 333771 files have been copied, last file was ).
Nov 8 04:34:57 main-menu[1021]: (process:26222): tar: write error: No space left on device
Nov 8 04:34:57 main-menu[1021]: WARNING **: Configuring 'live-installer' failed with error code 1
Nov 8 04:34:57 main-menu[1021]: WARNING **: Menu item 'live-installer' failed.

I found this in my sys error I am using guided encrypted setup and a 16GB usb so I don't know how they cannot be enough space?

I tried manually doing my own partitions and setting them all up with ample space but I still get this error can anyone help?

This is my full log

http://pastebin.com/3XPDgbNg

UPDATE2: So I thought my issue was maybe my 8GB didn't have enough storage so I got out another 16gb, used WIN32 to image the USB stick and attempted again but sadly the same issue...
I think I will go and try another variant like back box and see if I run into a similar issue until I can narrow it down sadly.

So more and more attempts today, I am using the guided encrypted setup built into Kali and I select my USB drive.

After some digging I have found my syslog and debug error message here is the pastebin.
http://pastebin.com/3XPDgbNg

Long story short I found this as the error.

Code:

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Nov  8 04:34:57 base-installer: error: The tar process copying the live system failed (only 243824 out of 333771 files have been copied, last file was ).
Nov  8 04:34:57 main-menu[1021]: (process:26222): tar: write error: No space left on device
Nov  8 04:34:57 main-menu[1021]: WARNING **: Configuring 'live-installer' failed with error code 1
Nov  8 04:34:57 main-menu[1021]: WARNING **: Menu item 'live-installer' failed.

---

So I thought ok maybe the guided setup isn't giving me the right space, so I did a manual partition setup of the LVM and Encrypted drives with my root / and home, swap space and boot partition giving them all a bit more space "500MB for my boot" 6GB for home, 6GB for root and the remainder on my swap space....

However I STILL got the same issue with the same error stating there is not enough space? I have no idea what I am doing wrong the USB stick is 16GB and from what I read on the FAQ and guides it was a 4GB minimum so I should be fine space wise...