In case anyone is following this. I talked to Pioneer. The tech wanted to know what brand thumb drive I was using. It was Sandisk Micro cruiser. He told me the hidden .trash folder on the drive could be the issue. I used a freebie 2gb drive I got at a conf and the upgrade went thru without issue. Sounds/looks great. Now the second drive also has a .trash folder but I made sure to empty the trash on my Mac before I ejected. I think this might have also helped.