The "lost & found" directory is not a problem, it is an inherent part of the Linux file-systems (ext2/3/4). It gets created in every partition formatted as ext2/3/4. By default it is owned by root and normal users don't have even read permission to it, so you can't actually determine the space occupied by it. You can change the permission with "chown" command to see what's in and how much space it has occupied. Unless there was a problem and some files were recovered, it'll be empty occupying no additional space.
Originally Posted by greatsirkain
The 600 MB you noticed must have been the reserved space. It is by default 5% of the partition size, if the partition is ext2/3/4. You can change this %age, for example on partition /dev/sdb1, with -
0 is the percentage. For partition that contains the operation system or is bootable one, it is recommended to reserve at least 100 MB or more space to avoid crashes. Even for data partitions, it is recommended to reserve at least 2% or 200 MB to avoid excessive fragmentation.
sudo tune2fs -m 0 /dev/sdb1
That being explained, how are you trying to make it live??
As far as I know, it is mandatory to have the partition formatted as FAT or FAT32 if you want to install a "Live" system on it. This is because "syslinux" - the boot loader that boots a live os - is only compatible with FAT/32, it has been designed as such for a good reason.
Also, I think all the tools that create a Live USB specifically look for partitions that are formatted as FAT/32. They won't/can't use a partition if it is formatted as an ext file-system.
By your current partitioning scheme, it seems you are attempting a full installation, which is okay, but will significantly reduce the life of the card.