Maybe you put too big of a persistence file on, and it wouldn’t fit ? … I’ve always used a 2GB persistence partition on a 4GB memory stick (maybe a 3GB would fit, but never tried)… if that helps.
This is NOT the ideal way to install Ubuntu to an external USB hard drive, as (amongst other things) there is a limit to the size of persistence file that “USB Creator” will create…I think.
So I would install Ubuntu to a memory stick (with persistence), then boot to that… once booted, install usb-creator-gtk (if it isn’t already installed), then use that to install the ISO image to the external hard drive.
http://linuxforums.org.uk/MGalleryItem.php?id=1022
To install usb-creator-gtk, open a terminal and enter:
sudo apt-get install usb-creator-gtk
or install it through Synaptic or the Ubuntu Software Centre.
Once installed, you will find it in the menus at - System>Administration>Startup Disk Creator
I think this lets you decide how much “reserved extra space” to set aside for saving documents and, settings (persistence partition)… just be careful you don’t select your internal drive as the target (disk to use).
More info here:
https://wiki.ubuntu.com/LiveUsbPendrivePersistent
But (and I know I keep saying this) the best/easiest way to install Ubuntu/Mint on your external drive would be to find a PC where you can disconnect the internal drive prior to installation… then just load Ubuntu “properly”… ie. create an ext4 partition on the external drive the size you want for Linux, then install it to there (the rest of the drive can be partitioned as NTFS so you can still use the drive for Windows storage… Linux will still be able to see/use the NTFS partition))… then reconnect the internal drive and use the BIOS (or boot device selection screen) to select which drive to boot.
The PC you use for the installation doesn’t have to be the same PC that you intend to “normally” have the external drive attached to… unlike Window, once you install Linux to the external drive, it should be portable between PC’s… Windows would throw a driver and activation wobbly and crash unless the hardware was VERY similar… Linux on the other hand should just load the correct drivers as most are contained in the kernel/modules (well you might have to install “some” extra proprietary drivers, wireless etc. [once], and reconfigure the network configuration, but it shouldn’t crash).