Correct. Surprisingly all the grub2 parts seem to be in working order. The issue seems to lie somewhere with the vmlinuz.efi/initrd.lz...
I can follow the grub entry to my custom.iso, but the system hangs with "error: no suitable video mode found. booting in blind mode" if I use the vmlinuz-version-generic and/or vmlinuz-version-generic.efi.signed from the host OS. (the regular ubuntu-16.iso also displays the same message, but then proceeds to but correctly. So that shouldn't be the issue here).
But it does load when I copy over the /EFI and casper/{vmlinuz.efi,initrd.lz}. However it again eventually stalls with:
BusyBox v1.22.1 (Ubuntu 1:1.22.0-15ubuntu1) built-in shell (ash)
Enter 'help' for a list of built-in commands.

(initramfs) losetup: could not find any free loop devicet go on FAT32 partitions.

[I somehow can´t seem to get the formatting to stick with this next part, sorry :S]
After:
Begin: Loading essential drivers ... done.
Begin: Running /scripts/init-premount ... done.
Begin: Mounting root file system ... Begin: Running /scripts/nfs-top ... done.
Begin: Running /scripts/nfs-premount ... done.
Begin: Running /scripts/casper-premount ...
[ 10.177576] random: nonblocing pool is initialized
[10.473862] SGI XFS with ACLs, security attributes, realtime, no debug enabled
[10.479729] JFS: nTxBlock = 8192, nTxLock = 65536
[10.627678] EXT4-fs (sda3): mounted filesystem with ordered data mode. Opts: (null)
[10.776705] FAT-fs (sdb1): error, fat_get_cluster: invalid cluster chain (i_pos 1)
[10.776720] FAT-fs (sdb1): Filesystem has been set read-only
[11.029557] EXT4-fs (sdb3): mounted filesystem with ordered data mode. Opts: (null)
done.
Begin: ...waiting for devs... ... done.
touch: /dev/.initramfs/lupin-waited-for-devs: No such file or directory
stdin: Not a typewriter
mount: mounting /dev/sdb1 on /isodevice failed: Input/output error
warning: Cannot mount /dev/sdb1 on /isodevice
stdin: Not a typewriter
[11.689807] FAT-fs (sdc1): Volume was not properly unmounted. Some data may be corrupt. Please run fschk.
[11.740150] EXT4-fs (sdc2): mounted filesystem with ordered data mode. Opts: (null)
done.
ioctl: LOOP_CLR_FD: No such device or adress
[12.524128] EXT4-fs (loop0): mounted filesystem with ordered data mode. Opts: (null)
ioctl: LOOP_CLR_FD: No such device or address
ioctl: LOOP_CLR_FD: No such device or address
ioctl: LOOP_CLR_FD: No such device or address
stdin: Not a typewriter
[13.247442] FAT-fs (loop0): error, fat_get_cluster: invalid cluster chain (i_pos 1)
[13.870988] EXT4-fs (loop1): mounted filesystem with ordered data mode. Opts: (null)
ioctl: LOOP_CLR_FD: No such device or address
ioctl: LOOP_CLR_FD: No such device or address
stdin: Not a typewriter
ioctl: LOOP_CLR_FD: No such device or address
unable to open '/dev/sdc'
ioctl: LOOP_CLR_FD: No such device or address
[18.328866] EXT4-fs (loop1): INFO: recovery required on readonly filesystem
[18.329151] EXT4-fs (loop1): write access will be enable during recovery
[18.356624] EXT4-fs (loop1): recovery complete
[18.367799] EXT4-fs (loop1): mounted filesystem with ordered data mode. Opts: (null)
ioctl: LOOP_CLR_FD: No such device or address
ioctl: LOOP_CLR_FD: No such device or address
/init: line7: can't open /dev/sr0: No medium found
/dev/sr0: No medium found
stdin: Not a typewriter
ioctl: LOOP_CLR_FD: No such device or address
[27.398618] hidraw: raw HID events driver (C) Jiri Kosina
[27.401012] usbcore: registered new interface driver usbhid
[27.401366] usbhid: USB HID core driver

BusyBox v1.22.1 (Ubuntu 1:1.22.0-15ubuntu1) built-in shell (ash)
Enter 'help' for a list of built-in commands.

(initramfs) losetup: could not find any free loop devicet go on FAT32 partitions.

/dev/sdc is the location of my usb stick when I'm running my regular, hdd booted OS.
The errors seem just... weird... It's not even technically out of loops for as far as I know, because those could go all the way up to device loop7.