I am running OS X10.7.5 Lion Server and I am having some issues with the System Image Utility and could use some assistance.
I have a Laciw FW800 hard drive that has a bootable OS on it, specific to a classroom and it is not in a DMG format, it is just a boot drive. In the past when I've done this, I have created the master on this type of HD, took it to the server and created a NetRestore of that drive. Additionally, I've noticed that an .nbi extension was placed on the folder.
Today, I created the same, an the structure of the folder is wrong, no .nbi is on the folder, and it will not boot as the only item in the new folder is "system.dmg"
It sounds like you've hit an error during the creation process. Take a look at the log that was generated for the creation run. If it has no useful information, you might need to set the logging level to 'Debug' and run the creation again.