Sounds very familiar. I too had to make my own package containing data.tar.gz. instead of .xz and modify the installer script to fetch it from a local HTTP server instead. To get around the "FATAL: kernel too old" problem installing wheezy, I installed the RescueV3 tarball (sorry I don't have the link handy... I found the link somewhere on this forum) on a USB stick and booted oby JohnG - Debian
I'm not sure if this is a Pogoplug issue, or Debian in general. I have an E02 which I am unable to connect to from my laptop (OS X 10.9) when the laptop is connected via WiFi to my ISP's router (Actiontec V1000H). I spent the better part of a day installing and reinstalling before I finally twigged and tried to log in via a wired connection. But I'm getting ahead of myself... here&by JohnG - Debian