I know you did not used to be able to do mount -o loop on 770 and early n800, losetup used to be there, I have n800 with latest OS, are you running Hacker edition or what OS? is losetup on you box? How about something like this? losetup /dev/loop0 /media/mmc1/XFCE.img mkfs.ext2 /dev/loop0 mount -t ext2 /dev/loop0 /usr/local