Here is another take on the problem. I use Grub for DOS (grub4dos). The Grub version is the legacy version 1 not the current version 2. There are many caveats which I list below and hope I don't forget any. Some are due to my lack of knowledge meaning I simply have not gotten around to researching the area more deeply. This is probably a very old approach (i.e. from the Windows XP days). In spite of the limitations, I really like this approach. I have about four or five bootable USB sticks in my collection. It has saved me innumerable times when I could not boot a system, both Linux and Windows 7. It is extremely flexible in that you can simply go into the menu.lst file on the stick with a text editor, edit it quickly, and boot your system. You can create a useful rescue tool from which you can boot things like (1) Kaspersky rescue disk, (2) Truecrypt rescue ISO, (3) Windows 7 install ISO, (4) various Linux liveDVDs, etc. In the latter case I have used PCLinuxOS and KUbuntu 12.04 successfully.
Limitation / Caveat (1) - This solution is (maybe) limited to 8 GB first partitions / USB sticks. To date I have never been successful in getting it to boot from either a first partition or, in the case of a one partition only stick, an entire USB stick that is larger than 8 GB. I am sure there are many on this message board who know how to move past this perceived limitation but for my purposes, I was happy to live with it so I never investigated further. I have successfully used larger sticks that were set up with multiple partitions where the first partition is always 8 GB.
Limitation / Caveat (2) - ISO files that you want to boot MUST be contiguous. This can be frustrating. The best approach is to make a base template with the base Grub for DOS files which are tiny, set up your stick using dd from an image or another stick, and then copy over your ISOs. You MUST do this to a freshly (re)formatted USB stick to ensure the ISO is written contiguously. Plan to leave say 20% free space. You cannot simply erase an ISO you no longer want and copy over a new one, you have to start from scratch by reformatting the USB stick. Flash drives are different animals than magnetic storage media (traditional hard drives).
Limitation / Caveat (3) - I made my first original and now template USB using a tool in a Windows XP Pro virtual machine. You only need to do this once since once you have the MBR (master boot record) of the USB stick set up, you can easily clone it using dd. I am happy to provide the image file to anyone who wants it so you can avoid going the through the hoops I did to create your template stick.
Limitation / Caveat (4) - In terms of BIOS, I stopped at Windows 7 meaning I do not nor have I ever experimented with UEFI. In other words, I have no idea if you can use this Grub for DOS solution on a system with UEFI.
Caveat (5) Drive assignment - I believe this is more a concern when dealing with Windows than Linux since Linux provides much more control. The first drive (i.e. sda) is often assigned to the USB stick and the second (i.e. sdb) is assigned to the first hard drive in the system on which you are booting. This can and should be reversed using some mapping commands in the boot code in the menu.lst file. If you don't do this you can experience problems when trying to repair a Windows system since the Windows repair software doesn't check. The best example of how this can go wrong is, on more than one occasion, I wiped out the MBR on the USB Grub for DOS stick instead of on the SSD I was trying to repair. An example of the drive mapping code I refer to is as follows:
title Windows 7 DVD ISO on this USB Stick
find --set-root /Windows_7_64.iso
map (hd0) (hd1)
map (hd1) (hd0)
map /Windows_7_64.iso (hd32)
map --hook
root (hd32)
chainloader (hd32)
There is probably a fair bit of dated information on the internet about this solution. I have not looked in quite a while though.
Once again, I am happy to provide the image file for a Grub for DOS template to save people from trying to create it from scratch. If anyone is interested, let me know and I will post it on a public Dropbox link.