http://forums.truecrypt.org/viewtopic.php?t=18882&postdays=0&postorder=asc
and to skip iso check use the /noisocheck or /n  switches on truecrypt or mount the ISO using a virtual cd driver
  
contents of first link:
Here is how: 
  
 1. Format your USB stick from Windows: FAT, Quick, Default Allocation  Size. 
  
 2. Download Grub4DOS from: http://download.gna.org/grub4dos/ 
 Choose latest version. Here is the one I got: http://download.gna.org/grub4dos/grub4dos-0.4.4-2009-06-20.zip 
  
 3. Download Grub Installer from: http://download.gna.org/grubutil/ 
 Choose latest version. Here is the one I got: http://download.gna.org/grubutil/grubinst-1.1-bin-w32-2008-01-01.zip   
  
 4. Extract them on your hard disk. Run: grubinst_gui.exe 
  
 5. Click DISK. Choose your USB stick. Go 2 boxes down and click REFRESH.  On the PART list, choose "WHOLE DISK (MBR)". Make sure everything else  is unchecked below. 
  
 If it says something about --skip-mbr-test, type: "--skip-mbr-test"  without quotes in EXTRA box. 
  
 Click INSTALL. DOS box should pop up and tell you it transfered MBR. 
  
 6. Copy: file "grldr" from your extracted files to your USB stick. 
  
 7. Create a text file in the root of your USB stick and name it:  menu.lst 
  
 Put inside: 
  
 title TRUECRYPT RESCUE DISK 
 find --set-root /tc.iso  
 map --mem /tc.iso (hd32)  
 map (hd0) (hd1)  
 map (hd1) (hd0)  
 map --hook  
 root (hd32)  
 chainloader (hd32)  
  
 And save the file. 
  
 8. Copy TrueCrypt Rescue Disk (the iso you created during system  encryption) to root of USB and rename it to: tc.iso 
  
 If you don't have the iso, go to TrueCrypt program: SYSTEM > CREATE  RESCUE DISK... Follow hte prompts and copy that file to USB and rename  it to tc.iso 
  
 That is all. 
 
2.11.2010
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