Which loader are you running? Post a new system check; [you did properly update your wii with the "Softmod ANY Wii" right? And here, just to make certain, here's the latest rev of USB Loader GX: here. Have you tried a compressed AND non-compressed ISO folder? Noting the name of the folder created, does the 4th character contain a "U", "P", "J", or even an "E"? XXXU01 when it creates the folder?