If you
really just want to read from the HFS USB stick,
could it be a solution to create a disk image and read from that after mounting it in SheepShaver?
I would throw your files onto a 30GB image for you, if my ISP wasn't that terrible slow.
You might try MacOS Leopard in a VM to handle your files and copy them to an image SS can use.
Leo Server is hosted here:
http://macintoshgarden.org/apps/mac-os-x-server-105If you care reading the comments, there also is a pre-built instance for VMWare.
My guess is there are too many interfaces daisy chained.
MacOS, SheepShaver, MyComputer, Windows, USB drivers, MacDrive...
It may be near impossible to name the culprit of your problem.
Edit: Seems you were following the same track, while I posted, flood.
A disk image will be best created in OSX 10.4, 10.5 or 10.6.
Leopard was the last OSX flavour to write to NDIF images directly.
There always is dd and Terminal, but thats not point and click.
