I installed your image by downloading and unpacking it manually (had a bad wireless connection from the phone at the time - downloaded in on a laptop and later scp'd to the phone).

First impression - cool, Debian on a mobile phone :-)

The image is installed to MyDocs as per your recommendation. Still, I/O is slow but that's to be expected I guess. Have you tried to chroot directly to an exploded directory structure - ie. skipping the image mounting?

Will report more and try to get some feedback on the issues you mention in the first post.