Pendrivelinux may work fine when it comes to installing Desktop Ubuntu from USB flashdrive, the server version, however, is much more intricate.
Try following this guide:
https://help.ubuntu.com/community/UbuntuServerFlashDriveInstallerEven a solution considered to be working may fail from similar issues sometimes, depending on the specific hardware in use. In such cases, I usually recur to a network installation over the internet.