I’m experiencing exactly the same issue.
I’ve been running a Pi2 on a 32GB Micro SD for a few months now but after a recent update had some stability issues with HD TV and thought I’d try a USB install.
I used a 2GB Micro SD card for the installation routine and tried the second part of the install with a 16GB Lexar USB2.0 stick.
The Pi boots, tries to format the stick and hangs.
Tried reformatting both media and reinstalling but same issue.
Tried again with a 64GB Medion USB3.0 stick but no joy.
No log has been written to the SD card.