*** UPDATE - changed /dev/sr0 to /dev/ram0 in the last part (bolded) below. Sorry 'bout that.
After pulling my hair out (what's left anyway), I got this thing working. I saw other posts that say it just won't work with this release. Here's what I did:
After dropping to the mini-shell:
Determining root device...
The root block device is unspecified or not detected.
Please specify a device to boot, or "shell" for a shell...
boot() :: shell
Checked to see that the USB CD-ROM was found
cat /proc/scsi/usb-storage/0 [your number here may vary]
cat /proc/sys/dev/cdrom/info [I found my drive name was "sr0"]
ls -l /dev/sr0 [shows that the device doesn't exist]
cat /proc/devices | grep sr [shows me the major node (?), mine is "11 sr"]
mknod /dev/sr0 b 11 0
Then, it asks again for the boot device:
this time, I entered "/dev/ram0" and it booted into the livecd!
Hope this helps someone.