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1b1ed1a
(Get the code!)
When wubi copies the ISO from the USB it copies the entire partition. If your USB has a single 4GB partition it will copy 4GB onto the hard drive as installation.iso. Then if checks the size against 900000 bytes and fails it. Then it tries to download another.
If the USB partition is < 900000 bytes I assume it would work ok (haven't personally tested this). But the ISO copy shouldn't be allowed to copy something larger than this - as there is a potential to run out of space on the hard drive (USB sticks can be very large these days).