Is there any chance that this is Metaforic's work?
Someone pointed out the deal with Nintendo for the DS
http://www.joystiq.com/2009/05/13/metafori...s-for-ds-games/
Read the way they word it there -- they put security directly into the game code, so it becomes intrinsically linked... they say that metaforic's implementations are designed to spot the patching (and auto-patching) that goes on when playing a game on an R4 for example.
Logic leads me to believe that the reason why the backups fail and why USB doesn't work is because someone - be it Nintendo themselves or a contractor - has sat down and figured out how to make USB/DVDx/cIOS fail under certain conditions. The game routinely presents those conditions making the game freeze out, while retail discs go on unaffected.