I have also encountered this issue with a SanDisk USB 3.0 drive.
And, this workaround works for me.
http://forums.sandisk.com/t5/ratings/ratingdetailpage/message-uid/342584/rating-system/message_ratings

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https://bugs.launchpad.net/bugs/172937

Title:
  SQUASHFS error while booting from live cd

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