As penguindbait stated in the first post of this thread you should probably reboot and reinstall install-tools before booting from SD, that's because the device needs to be rebooted to read the new partition table on the SD (it was the same with fanoush "manual" initfs-flasher).

Here's what I did:
1) Booting from flash, installed install-tools.deb for the new partitions to be made
2) Rebooted from flash, reinstalled install-tools.deb to copy the system and make the SD bootable
3) Rebooted from internal SD, working like a charm

Hope it helps