I am with you, each person should use the best tool for the job and in some cases that will be proprietary software. I do not think locking down software is necessarily bad, but it does severely limit it's evolutionary future and limit the users' capability to diagnose and correct issues.

MY observation of the FOSS loyals is that they are against proprietary software because it restricts knowledge (the source code) from the world and limits the potential for the functionality to evolve.

Any distribution would fulfill your needs. If you were a redhat user then I recommend trying fedora which is the community version of redhat. After installation you can use yum (the package manager) to install everything that you need.

Welcome to the forum, I look forward to your question and ideas.

I know that you can install dd-wrt into nearly all of the WRT series and configure them as wireless repeaters, but it is not possible to install dd-wrt on that router. I recommend checking tomatoe, openwrt and other firmware to see if any have support for your router and can enable the repeater setup.

The flash medium can overheat and loose data including the connectivity data, it will only make it completely unusable if the head causing physical damage else it will be a temporary problem.

Can you please share the error message that you are receiving from the bootloader.

On another note, I am encouraged by the amount of research and work you are doing. If you get this working I highly recommend documenting it on a wiki so others can learn from you. having a stable customized persistent gaming medium that can be used on various machines would definitely interest many people.

There are many posts online about making a non-persistent live ISB image, one that references many good materials is at http://ubuntuforums.org/showthread.php?t=1980512 . That will allow you to getup writable space on the usb stick.

The lack of rebooting could be due to the usb device overheating, as the flash media on a usb stick gets very hot after a few read/write operations, this is why it is not recommended to use a non-persistent image let alone try to play games from the usb stick.