I have managed (though unable to recreate it so far), using a persistent image created with the dvd booted knoppix and saved on the flash drive, to get:
1. unbinding the cdrom from all media drives
2. adding another drive for the dvd on the desktop (no idea why or how it happened)
3. the two hdd partitions are now rw and open properly from the desktop (after unbinding from /cdrom and remount with rw,users,umask=999)

However, since the image is mounted as device bound to the flashdrive, I can't remount the flashdrive and set its read/write and user permissions.

I tried moving the persistent image to the hdd so that the flashdrive doesn't have anything permanent bound to it, but it just went back to having everything bound to /cdrom and read only.

I'll try it all again from scratch now, and this time save the image directly to hdd.

If I used a fromhd=... cheatcode for booting from the flashdrive, would that eliminate the /cdrom binding and read-only modes?