It loops trying to unmount /sysroot (and /mnt/squashfs). Both of these should be unmounted during the init/run-init process, with MNT_DETACH if necessary. This should solve the shutdown problem.
Created attachment 142897 [details] patch for this This patch umounts the squashfs, and the initial iso9660 root, so that there are no leftover entries in /proc/mounts that confuse shutdown.
Committed, thanks! http://gitweb.freedesktop.org/?p=users/david/pilgrim.git;a=commitdiff;h=b27e5368966c75cc3901a5e9f393425c69c821bc I'll spin a new livecd tonight with this fix.