Windows 95 was never designed to boot from a USB flash drive, so I wouldn't call this a Windows 95 design issue.
nkeck72 wrote:
Since I do not have a hard drive for the machine, I have enabled USB emulation in the BIOS which makes a USB flash drive appear to be (and pretty much act like) an ATA hard disk.
Emulation makes the flash drive accessible using INT 0x13. It does
not make the disk appear to be an ATA hard disk. In fact, it may not appear as a hard disk at all - many BIOSes will automatically choose between hard disk and floppy disk emulation based on the contents of the flash drive.
How big is the flash drive? Do the contents of the boot sectors make sense? If you replace the boot code (and only the code, none of the data) with something that displays the value of DL and halts, what value does it display?
nkeck72 wrote:
Edit: Board will not let me post the image, apparently max file size is 64KiB
You can upload it somewhere else.
Try this site. (You don't need to create an account.)