Okay, that's what I thought you were using but for some reason I couldn't find any confirmation for it. I've got something else I want you to try.
I heard reports in the past that Disk Utility was not functioning correctly on Tiger past 10.4.8, but we never were able to confirm exactly what was wrong with it. So what I am proposing is to eliminate Disk Utility from the equation.
What you should do is open the Terminal, insert the DVD and large flash drive, and then type the following command once the drives have been recognized and mounted:
This should list all of the available disks/discs attached to your Mac. Identify the disk numbers for your DVD drive and flash drive. (should be "disk1" or "disk2" or similar. If it looks like "disk1s1" just ignore the part after the first number.) Assuming that your flash drive is still named OSXDVD, enter these commands:
sudo diskutil umount force /Volumes/OSXDVD
(enter your password when prompted)
sudo diskutil umount force /Volumes/"Mac OS X Install DVD"
Finally, we're going to do a bit-for-bit transfer of everything, including the Windows software, from your DVD to the flash drive:
dd if=/dev/disk<number of the DVD disk entry from before> of=/dev/disk<number of the flash drive> bs=2048