I had this problem yesterday when trying to see if I could fudge-partition an 8GB card to have the RISC OS 2Gb and a usable FATex for the rest. It *seemed* to work at one point but the boot process failed pretty much as point 5. about; it failed to complete the boot. This used to be the situation on RISC OS machines if the disk wasn't happy so I suppose the partition stuff had confused the system in a similar manner.
Doing a plain simple
dd if=RISCOSthingy.IMG of=/dev/whicheverrawdisk bs=1m
made it all happy.
Pity, really. A way to access the rest of the SD memory would be nice.