For sake of completeness I guess I'll respond to myself. I think I at least have some of the answer. I was booting knoppix from CD as the instructions say but I was doing so on a machine that also had KNOPPIX installed to the hard drive. Apparently, something in the remaster process picks up that fact and inorporates its awareness of the hard drive install into the remaster. Unfortunately I have no idea what it might be picking up (having not yet read the remaster from hd instructions). So, I wiped all the drives in the machine so that the only OS was the Knoppix CD and remastered. This time it worked.

I deleted the bash_history file from /root and deleted everything under the tmp directories including sub directories. Still don't know what files would fall under the etcetera category but then apparently neither do any of you. If someone does, please take the time to respond to maybe help other remastering noobs like me.

Hope this helps some others.