I wouldn't be too concerned if the Mac won't boot with the flash drive plugged in; that's a relatively commonplace problem with USB devices, and the solution is not to have them plugged in when you start up. That should be no inconvenience for you with a flash drive, though it can be a real drag with some other kinds of devices.
Make sure the File Exchange control panel and the Foreign File Access extension are not disabled [check Control Panels (Disabled) and Extensions (Disabled) for them, and if you find them there, move them into the Control Panels and Extensions folders respectively].