failed in creating bootable hdd image

Hi,

I am attempting to create a bootable hdd image which boots Syslinux and then chain loads FreeDOS.

At first I experiment with a physical hdd (/dev/sdb).
The procedure involves the following steps :

1. Install the Syslinux MBR boot code.
   dd if=mbr.bin of=/dev/sdb bs=440 count=1 conv=notrunc
2. Create a bootable partition (/dev/sdb1) of size 7MB and type 04 (FAT16 <32M).
3. mkfs.fat /dev/sdb1
4. Install the Syslinux boot loader.
   syslinux --install /dev/sdb1
5. Mount "/dev/sdb1" at "/mnt"
   mount -t vfat /dev/sdb1 /mnt
6. Copy the Syslinux modules "{chain,libutil,libcom32}.c32" to "/mnt"
7. Copy the FreeDOS files "KERNEL.SYS" and "COMMAND.COM" to "/mnt"
8. Create the file "/mnt/syslinux.cfg"
   Code:DEFAULT FreeDOS
   LABEL FreeDOS
   COM32 chain.c32
   APPEND fs freedos=/KERNEL.SYS
9. umount /mnt

The resultant disk works as expected.

I proceed to repeat the procedure on an image file.

1. dd if=/dev/zero of=FD.img bs=1M count=8
2. losetup /dev/loop0 FD.img
3. dd if=mbr.bin of=/dev/loop0 bs=440 count=1 conv=notrunc
4. Create a bootable partition on "/dev/loop0" of size 7MB and type 04 (FAT16 <32M).
   "fdisk" reports that the partition starts at sector 2048.
5. losetup -d /dev/loop0
   losetup -o 1048576 /dev/loop1 FD.img
6. mkfs.fat /dev/loop1
7. syslinux --install /dev/loop1
8. mount /dev/loop1 at /mnt
9. Copy the Syslinux and FreeDOS files to "/mnt"
10. Create the file "/mnt/syslinux.cfg" as before
11. umount /mnt
12. losetup -d /dev/loop1

The resultant image file is then moved to a bootable device with a working copy of Syslinux (with module MEMDISK included).
When I try to load the image with the command :
Code:memdisk initrd=FD.img harddisk rawThe procedure halts at the step showing
Code:Loading boot sector... booting...Could someone kindly advise ?