there are several issues with the script, among the most obvious :

1) there is problem with the line "--no-log" as dialog can't use "--" in the text field, it tries to read it as an argument, so the resulting u-boot script is not correctly written.

2) packages from nemo are not copied to /mnt/tmp/ as the directory doesn't exist at the time the script attempts the operation.

3) the script executes bash even if a non custom kernel (nemo) is selected, and the user is not prompted that he needs to type "exit" to continue.

4) if the user chooses the old ubuntu kernel, the resulting uInitrd is corrupt , u-boot will stop booting because of this.

you can easily fix the script..

1) find and replace (--no-log) with ("-"\- "--no-log") without the brackets of course.

2) add the line: "mkdir $MOUNTPOINT_TARGET/tmp/" right before the line with "# Downloading", without quotes.

3) just type exit when the script prints "Install your custom..." to continue

4) the ubuntu kernel can be booted without the initrd, create the boot script manually without loading the uInitrd file, or just use nemo kernel, it doesn't matter much as both are unstable.