Ran DW on the recalcitrant Sno Leopard partition -- but in trying to erase the contents of that partition, got the same POSIX error.

So went to the partition map and deleted the snow Leopard partition and created a replacement partition of the same size. Then using CCC, cloned Lion to the newly created partition.

My external is a FW drive and is formatted as APM (not GUID) because I have a partition on it holding a clone of an older PPC Mac. Can boot from the newly created Lion partition.