Got the lightdm language selector working!
There is a fix. a short script [slash]etc/X11/Xsession.d/39-lightdm-dmrc-fix (use the newest update)
http://bugs.debian.org/cgi-bin/bugreport.cgi?bug=679386
The only newer debs are in experimental, language selector also doesn't work in that version and it's 3 months old so don't expect an official fix anytime soon
Also I built the latest live-config from git (3.0.18-1) which looks like it just went into experimental today. The freezeup bug seems sorted. I don't know if hooks work yet without our custom script.
Custom config script refracta-lang is working, simply config=refracta-lang lang=de_DE is enough for locale and keyboard. The clock could be set to UTC there in a future update, if that's considered a good idea for non-US users. In the meantime, just use config=refracta-lang,tzdata
No need now to use "noconfig" before "config=whatever"
"noautolgin" was on my usb's cmdline, left over from older versions. Although that should have caused no problem beyond being useless, removing it was the solution.
Runlevel 3 (no X) is very useful (especially for testing) and works, as long as you remember if <init 3> is used to stop X you get left on tty7 so have to do ALT+F1 to get a prompt.