edit diskless create tbz, check where the apt-get update line is, and at the end type || :
and re-run it.
Edit: I take that back- I think it is on line 417:
LC_ALL=C chroot $TEMP_DIR apt-get -y -qq update || :[/s]
My mistake- didn't realize you needed to run the diskless create on the current snapshots- to get it to run I had to use:
sudo -i /usr/pluto/bin/Diskless_CreateTBZ.sh
Thanks again phenigma!