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I was able to put Windows 8 setup files on my usb from the installer. Now I just upgraded my machine to Mountain Lion. I have gone through the BC Assistant and it only asks for my Windows CD to be put into my drive. There is no longer an option to install via other media.

Anyone know of a workaround to install with USB stick?

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This doesn't exactly answer your question but may help solve your problem: create a bootable Windows DVD from the Windows 8 setup files, as explained here.

I did it myself some months ago when upgrading Windows XP to Windows 8, and it worked without a hitch.

You will need:

The steps are:

  1. Download and install oscdimg.exe.

  2. Put the Windows 8 setup files in a folder. While any name will do I found C:\WIN8AIO to be a popular choice, so I'll use it.

  3. Open a command prompt as administrator and create the ISO image C:\WIN8DVD.ISO like this:

    \path\to\oscdimg.exe -lWIN8DVD -t10/26/2012:00:00 -m -u2 -bC:\WIN8AIO\boot\etfsboot.com C:\WIN8AIO C:\WIN8DVD.ISO
    

    For more information on oscdimg.exe and its command line options see this article at Microsoft.

  4. Burn C:\WIN8DVD.ISO and use it with Boot Camp Assistant on your Mac.

  • The question is about installation from USB, not from a DVD. – xpereta Mar 10 '14 at 9:06
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This article entitled "How To Easily Install Windows 7 & 8 onto An External USB Storage with PWBoot" published on the 27th May 2013 by K.Chen for nextofwindows.com maybe helpful and provides step by step instructions (which should be followed very carefully).

PWBoot (Portable Windows Boot) aims to simplify the process of making Windows Operating System to boot from any USB storage devices.

  • The question was about creating the USB installer, not installing to a USB disk. However, have you verified that this works to boot Windows from a Mac? In my experience this procedure works to create the USB installation but it won't boot on a Mac. – xpereta Mar 10 '14 at 9:04

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